Someone in accounts has a stack of hotel folios and a simple question: can we take the GST back? The honest answer is that most of the time you cannot, and the reason has nothing to do with how carefully the invoice was raised. It is decided before anyone books, by the state the hotel sits in.
Here is how the test actually runs, in the order it decides your claim. One caveat first: GST positions get clarified and amended, so treat this as orientation and confirm your specific case with your accountant.
Test one: is the hotel in the state you are registered in?
This is the test that quietly kills most claims, so it goes first.
For accommodation, the law fixes the place of supply as the location of the property. Not the guest's address, not the billing company's head office, not the state on the GSTIN. The hotel is therefore making an intra-state supply and must bill CGST plus SGST of its own state, every time.
Those two credits can only be set against liability in that same state. So a company registered only in Delhi that pays for a Mumbai hotel ends up holding Maharashtra CGST and SGST credit with no Maharashtra liability to use it against. The credit is not denied so much as stranded, which amounts to the same thing on the balance sheet.
This is also why asking the hotel to charge IGST instead does not work. The hotel is not choosing the tax head; the place-of-supply rule chose it. A hotel that switched to IGST to make your credit work would be filing incorrectly, and handing over your GSTIN does not change where the building is.
Test two: was the night billed at 18% or 5%?
Clear test one and you still have to clear this one.
Accommodation runs on two slabs, set by the actual price charged per room per night. Rooms at ₹7,500 or below are 5%, levied on the condition that input tax credit is not taken on that supply. Rooms above ₹7,500 are 18%, with credit. So a ₹4,000 room carries no claimable credit even for a guest registered in the same state, because the lower rate and the absence of credit are a package.
The practical consequence for a travel policy is slightly perverse: the cheaper room is often the one whose tax you can never recover. If you want the mechanics of the slabs themselves, including what replaced the old ₹1,000 exemption, our guide to GST on hotel rooms in India covers them properly.
Test three: is it the room, or is it food?
A folio is not one supply. The room line and the restaurant line are taxed differently and claimed differently, which is why "can we claim GST on the hotel bill" has no single answer.
Food and beverages are blocked credits. Section 17(5) puts food and drink on the blocked list outright, so restaurant charges on the folio are generally not claimable at all, whichever state you are in. The usual exceptions are narrow: where your own business makes outward supplies of the same category, or where an employer is legally obliged to provide the item to employees.
On top of that, an in-hotel restaurant billing at 5% carries no credit anyway, on the same no-credit condition that applies to the lower room slab. Two independent reasons, same outcome. Our note on GST on restaurant food inside hotels explains which rate the F&B line takes and why the room tariff decides it.
Running the hotel, not claiming the credit?
Sukoon captures the company name and GSTIN at check-in, splits room and F&B on the folio at the right rates, and produces a compliant tax invoice, so your corporate guests stop asking for a reissue after Night Audit.
See Sukoon's GST billingWhat to actually do about it
If you are the business claiming: give the hotel your legal entity name and GSTIN at check-in, not at checkout. Once the folio is settled and Night Audit has run, reissuing it against a different recipient is a painful correction for the hotel and often simply refused. Then set expectations internally: out-of-state stays and sub-₹7,500 rooms are a cost, not a recoverable tax, and a travel policy that assumes otherwise will keep producing claims that get reversed.
If you are the hotel: this is a guest-experience problem wearing a tax costume. The corporate guest who cannot claim the credit because your front desk billed the individual instead of the company will remember it. Capture the GSTIN as a check-in field rather than a checkout scramble, and keep the room and F&B lines separated on the invoice so the guest's accountant can treat them differently. Our hotel GST invoice format guide covers what the document needs to carry, and the check-in SOP covers where in the flow to ask.
The short version
You can claim GST on a hotel bill when three things line up: the hotel is in a state where you are registered, the night was billed at 18%, and the line is the room rather than the food. Miss any one and the credit is gone. Most business travel misses at least one.
FAQs
Can we claim GST input credit on a hotel bill?
Sometimes, and the state usually decides it. Hotel accommodation is always billed with CGST and SGST of the state where the hotel stands, because the place of supply is the property itself. If your GSTIN is registered in a different state, you have no CGST or SGST liability in the hotel's state to set that credit against, so it is stranded. If you are registered in the same state, the credit is available on the room, but only where the night was billed at 18%.
Can we claim GST input on a hotel stay outside our own state?
In practice, no. An out-of-state stay is billed as CGST plus SGST of the hotel's state, and those two credits can only be used against liability in that same state. A company registered only in Delhi that pays for a Mumbai hotel holds Maharashtra CGST and SGST credit it cannot use. This is the single most common reason a hotel ITC claim fails, and no amount of invoicing detail fixes it.
Why does the hotel not just charge IGST so we can claim it?
Because the hotel is not allowed to. For accommodation, the place of supply is fixed by law as the location of the property, which makes the supply intra-state for the hotel regardless of where the guest or the paying company is registered. A hotel that charged IGST to make a guest's credit work would be filing incorrectly. Giving the hotel your GSTIN does not change the place of supply.
Is GST input credit available on a room in the 5% slab?
No. The lower accommodation slab is levied at 5% on the condition that credit is not taken on that supply, so a room at ₹7,500 or below per night does not carry a claimable credit even for a guest registered in the same state. Only nights billed at 18%, meaning rooms above ₹7,500, carry credit, and even then the state test still has to be met.
Can we claim GST credit on hotel food bills?
Usually not. Food and beverages sit in the blocked-credit list under section 17(5), so restaurant charges on a hotel folio are generally not claimable unless your business makes outward supplies of the same category or the expense is one an employer is legally obliged to provide. A restaurant inside the hotel billing at 5% carries no credit in any case. This is why the room line and the F&B line on the same folio can be treated completely differently.
What should we give the hotel at check-in to claim the credit?
Your registered legal name and GSTIN, at check-in rather than at checkout. The invoice has to carry the GSTIN of the recipient for the credit to be attributable to your business, and it is far harder to get a folio reissued after settlement and Night Audit. Also confirm the hotel is billing the company rather than the individual traveller.