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Declaration by registered supplier of hotel accommodation service

CA Gaganmeet Singh

Declaration by GST registered supplier of hotel accommodation service.

Under India’s Goods and Services Tax (GST) framework, the classification of a hotel as a “specified premises” determines the applicable GST rates for services such as restaurant operations within the establishment. To provide clarity on this, the Central Board of Indirect Taxes and Customs (CBIC) has introduced a mechanism that allows registered hotel accommodation providers to declare whether their premises should be categorized as “specified” or “not specified.” This provision is outlined in Notification No. 05/2025-Central Tax (Rate), issued on 16th January 2025, and is effective from 1st April 2025.

Understanding ‘Specified Premises’

As per the revised guidelines applicable from 1st April 2025, a premises is considered “specified” for a financial year if it meets any of the following conditions:
1. Revenue Threshold: If the supplier provided hotel accommodation services in the preceding financial year, with a value of supply exceeding ₹7,500 per unit per day or its equivalent.
2. Declaration in the Previous Year: If a registered hotel service provider had declared the premises as ‘specified’ by submitting the required declaration between 1st January and 31st March of the previous financial year.
3. New GST Registration Declaration: If a person applying for GST registration has declared the premises as ‘specified’ within 15 days of receiving acknowledgment of their GST registration application.

These amendments replace the earlier system based on declared tariffs, shifting the focus to the actual transaction value, ensuring that tax liabilities are more aligned with real revenues.

Declaration Process for ‘Not a Specified Premises’

Registered hotel service providers who wish to classify their premises as “not specified” need to follow the steps below:
1. Filing Timeline: The declaration must be submitted between 1st January and 31st March of the preceding financial year to be applicable for the next financial year. This ensures proper classification before the new financial year begins.
2. Prescribed Format: The declaration should be filed in the format provided under Annexure IX of Notification No. 05/2025-Central Tax (Rate).
3. Submission Process: The declaration must be submitted to the jurisdictional GST authority responsible for the supplier’s GST compliance.

Once a premises is classified as “not a specified premises,” this status remains in effect for the entire financial year and will continue in subsequent years unless a new declaration is filed to change it.

Impact of Declaration on GST Rates

Whether a premises is classified as specified or not specified directly affects the GST rate applicable to restaurant services provided within the hotel:
• Specified Premises: Restaurant services provided at these premises attract 18% GST, with the benefit of input tax credit (ITC).
• Not Specified Premises: If a premises is not classified as “specified,” restaurant services attract a concessional GST rate of 5%, but the supplier cannot claim input tax credit (ITC) on related expenses.

By choosing to classify their premises as “not specified,” hotel service providers benefit from lower GST rates on restaurant services but must forego the ability to claim input tax credit on input expenses.

Conclusion

The declaration process for classifying hotel premises as “not a specified premises” is governed by Notification No. 05/2025-Central Tax (Rate), issued on 16th January 2025, and is effective from 1st April 2025. This system allows hotel businesses to strategically choose between a higher GST rate with input tax credit or a lower GST rate without input tax credit, based on their operational requirements.

Annexure VII

OPT-IN DECLARATION FOR REGISTERED PERSON
(See para 4(xxxvi))
Declaration by a registered person supplying hotel accommodation service before the jurisdictional GST authority declaring the premises to be a ‘specified premises’.

Reference No.-

Date: –

  1. I/We ……………………. (name of Person) do hereby declare that the premises at ……(address)…… shall be a ‘specified premises’ for the Financial Year ………(yyyyyy)……….
  2. Further, I/We understand the said declaration will apply to the entire Financial Year specified in (1) above and will continue to apply to subsequent Financial Years also, unless I/We declare the premises as not a ‘specified premises’ by filing a declaration in the format specified at Annexure IX.

    Legal Name: –

    GSTIN: –

    PAN No.

    Name of Authorized Signatory:

    Signature of Authorized Signatory:

    (Dated acknowledgment)

Note:

  1. The above declaration, declaring the premises as a ‘specified premises’ for a Financial Year, shall be filed by a registered person on or after 1st of January of the preceding Financial Year but not later than 31st of March of the preceding Financial Year.
  2. The above declaration shall have to be filed separately for each premises

Annexure VIII

OPT-IN DECLARATION FOR PERSON APPLYING FOR REGISTRATION
(See para 4(xxxvi))
Declaration by a person applying for registration before the jurisdictional GST authority declaring the premises to be a ‘specified premises’.

Reference No.-

Date: –

  1. I/We ……………………. (name of Person) have applied for registration vide ARN No. ………………………. and do hereby declare that the premises at ……(address)…… shall be a ‘specified premises’ from the effective date of registration till the end of the Financial Year.
  2. Further, I/We understand the said declaration will apply to the subsequent Financial Years also, unless I/We declare the premises as not a ‘specified premises’ by filing a declaration in the format specified at Annexure IX.

    Legal Name: –

    ARN: –

    PAN No.

    Name of Authorized Signatory:

    Signature of Authorized Signatory:

    (Dated acknowledgment)

Note: The above declaration shall have to be filed separately for each premises.

Annexure IX

OPT-OUT DECLARATION
(See para 4(xxxvi))
Declaration by a registered supplier of hotel accommodation service before the jurisdictional GST authority declaring the premises as not a ‘specified premises’.

Reference No.-

Date: –

  1. I/We ……………………. (name of Person) do hereby declare that the premises at ………(address)…… shall not be a ‘specified premises’ for the Financial Year ………(yyyy-yy)………
  2. Further, I/We understand the said declaration will apply to the entire Financial Year specified in (1) above and will continue to apply to subsequent Financial Years also, unless I/We declare the premises to be a ‘specified premises’ by filing a declaration in the format specified at Annexure VII.

Legal Name: –

GSTIN/ARN: –

PAN No.

Name of Authorized Signatory:

Signature of Authorized Signatory:

(Dated acknowledgment)

Note:

  1. The above declaration, declaring the premises as not a ‘specified premises’, for a Financial
    Year, shall be filed on or after 1st of January of the preceding Financial Year but not later
    than 31st of March of the preceding Financial Year.
  2. The above declaration shall have to be filed separately for each premises.

Also Read:

  1. Recommendations of the 55th Meeting of the GST Council
  2. Changes in GST and Income Tax during the Financial Year 2024-25
  3. TDS and TCS provisions applicable from April 1, 2025
  4. Rationalizing TDS: A Deep Dive into Budget 2025’s Proposals

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