Money: GST, loans and subsidies
GST for homestays in 2026: 5% on rooms up to ₹7,500
Quick answer
Since 22 September 2025, a room priced up to ₹7,500 a night carries 5% GST (2.5% CGST + 2.5% SGST) without input tax credit; it was 12%. A room above ₹7,500 carries 18%, with credit. In Kerala you must register for GST once your turnover passes ₹20 lakh in a financial year.
The rates
| What you sell | GST | Input tax credit |
|---|---|---|
| Room up to ₹7,500 a night | 5% (2.5% + 2.5%) | Not allowed |
| Room above ₹7,500 a night | 18% (9% + 9%) | Allowed |
| Food, where the premises are not "specified premises" | 5% | Not allowed |
| Food, at "specified premises" | 18% | Allowed |
The 5% rate for rooms up to ₹7,500 is fixed: you cannot choose 18% with credit for those rooms (Notification 15/2025-Central Tax (Rate)).
What "specified premises" means
For a financial year, your premises are "specified premises" if any room there was sold above ₹7,500 a night in the previous year, or if you chose to opt in. The window to opt in, or out, for the next year is 1 January to 31 March every year. Most small homestays are not specified premises, so their food carries 5% without credit.
When you must register
Under section 22 of the CGST Act you must register once your turnover in a financial year passes ₹20 lakh. Kerala is not a special category state, and the ₹40 lakh limit is only for people who sell goods alone, so a homestay's limit is ₹20 lakh.
Rooms sold on Booking.com, Airbnb or MakeMyTrip
Under a 2017 notification (17/2017-Central Tax (Rate)), when a homestay that does not have to register sells rooms through a booking platform, the platform pays the GST on those rooms. The notification has been amended since: check the current version with your accountant.
The composition scheme is closed to anyone who sells services through such a platform, so a homestay listed on a booking site cannot use it. For rooms up to ₹7,500 it would cost 6% anyway, more than the normal 5%.
Return dates once you are registered
| Return | Monthly filers | Quarterly filers (QRMP) |
|---|---|---|
| GSTR-1 (sales) | 11th of the next month | 13th of the month after the quarter |
| GSTR-3B (summary and tax) | 20th of the next month | 22nd of the month after the quarter (Kerala) |
| Tax for months 1 and 2 of a quarter | Not needed | PMT-06 by the 25th |
| GSTR-9 (annual) | 31 December | 31 December |
A GST Council newsletter (September 2025) says businesses with turnover up to ₹2 crore do not have to file GSTR-9 for 2024-25 onwards.
This guide does not cover late fees, interest or input credit reversal. Ask a chartered accountant before you register or file.
Bills with GST
If you have a GSTIN, the guest bills on a Homlystay website show the GST split for you. See what a Homlystay website does.
Official sources
- Notification 15/2025-Central Tax (Rate), 17 September 2025
- GST Council, 56th meeting press release (September 2025)
- Notification 05/2025-Central Tax (Rate): specified premises
- CGST Act, section 22: who must register
- CGST Act, section 10: composition
- Notification 17/2017-Central Tax (Rate): services through booking platforms
- CGST Rules, rule 61: return dates
- CGST Rules, rule 80: annual return
- GST Council newsletter, September 2025 (GSTR-9 up to Rs 2 crore)
This is a plain guide, not legal or tax advice. Rules change: check with the office named here before you act.