GST 2.0 and hotel rooms: update your prices everywhere
India's tax overhaul makes mid-range stays cheaper. Guests will notice — but only if your website, booking engine and listings show the new totals correctly.
By the Xuru Technologies team · 24 September 2025
Key takeaways
- India's revised GST structure took effect on 22 September 2025.
- GST on hotel accommodation with a room tariff up to ₹7,500 per night was set at 5%, down from 12% (without input tax credit).
- Mid-range stays and family holidays become cheaper, supporting domestic tourism.
- Hotels must update rates and tax settings across their website, booking engine and OTAs.
A tax cut only helps your bookings if guests see the lower total price. Out-of-date booking engines and listings can hide the benefit — or create billing errors.
What happened
Deccan Herald (PTI) and Outlook Traveller explained the changes and their expected impact on travel costs.
What it means for hotels and homestays
- Tax settings in your PMS and booking engine need updating for the correct slab.
- Total prices shown to guests should reflect the new rate.
- Marketing opportunity: "Now cheaper to stay" messages for domestic travellers.
- Input tax credit implications should be reviewed with your accountant.
Update checklist
| System | Action |
|---|---|
| Booking engine | Correct GST slab by room tariff; test totals |
| OTA listings | Check tax settings and displayed totals |
| Website | Update offers and FAQs on taxes |
| Invoices | Confirm new rates on bills from 22 September |
Frequently asked questions
Which hotel rooms get 5% GST?
Accommodation with a room tariff up to ₹7,500 per night, under the revised structure. Confirm details with your tax adviser.
Do we lose input tax credit?
The 5% rate for this category is without input tax credit. Discuss the impact on your costs with your accountant.
Should we lower our room rates?
The tax change lowers the total guest price automatically. Decide separately whether to adjust your base rate.
Correct prices, more direct bookings.
We build hotel websites with booking engines configured correctly for GST and clear, all-in pricing.
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