GST on homestays and room rentals in India: rates, registration and platforms
Start a BNB business · September 30, 2026
5% or 18%? Do you need to register? And what changes when bookings come through a platform?
GST on accommodation has changed several times since 2017. If you run a homestay, villa or guest house, or you are building a booking platform, here is where things stand.
This article is general information, not tax advice. GST rules change by notification, so confirm your position with a chartered accountant.
Current GST rates on room rent
From 22 September 2025, accommodation services in hotels, inns, guest houses, homestays and similar places are taxed on the value of supply per unit per day:
- Below ₹7,500 per night: 5% GST, without input tax credit (ITC).
- ₹7,500 and above per night: 18% GST, with input tax credit.
The 5% rate means the host cannot claim credit for GST paid on purchases such as furniture or linen, but the guest pays less tax.
What happened to the ₹1,000 exemption?
When GST started in 2017, rooms with a declared tariff below ₹1,000 a day were exempt. That exemption was withdrawn in July 2022, so budget rooms became taxable too. Today the ₹7,500 line is the one that matters.
Do homestay owners need to register?
A business supplying services generally needs GST registration once its aggregate turnover crosses ₹20 lakh in a financial year (₹10 lakh in special category states). Many small homestays fall below this.
There are exceptions to watch for, and the threshold works differently when you sell through online platforms, so check with your accountant before relying on it.
How GST works when rooms are booked through a platform
Under section 9(5) of the CGST Act, the government can make an e-commerce operator liable to pay GST on certain services supplied through it, as if the operator were the supplier. Accommodation services are one of the notified categories. In practice this means that when a guest books an unregistered homestay through an online platform, the platform may have to pay the GST on that booking.
If you are starting your own booking platform, this matters for three reasons:
- You will need GST registration as an e-commerce operator from the start.
- Your pricing must account for it: decide whether the GST sits inside the host's price or is added on top for the guest.
- Your system must track it: which hosts are registered, which bookings you owe tax on, and the correct rate for each night.
Tips for hosts and platforms
- Show tax-inclusive prices at checkout so guests are never surprised.
- Keep a GSTIN on file for every registered host.
- Issue invoices for every booking.
- Use software that applies the right rate for the right price band, and update it when rates change.
Running a platform? Get this right on day one
A good booking platform lets you configure tax rules from the admin console instead of hard-coding them, so a change in the GST rate is a settings change, not a development project. That is one of the reasons a ready-made platform beats a quick custom build. It takes less than ₹3 lakh to start your very own BNB platform: see how to start your own BNB booking platform in India or request a free demo.