GST for homestays in India: what hosts actually need to know

GST on a stay changed on 22 September 2025, and a lot of what is written about it online still quotes the old 12%. This guide sets out the rules as they stand, with the section or notification behind each one, so you can check anything you like at the source.

Do you need to register?

You must register once your aggregate turnover passes ₹20 lakh in a year, or ₹10 lakh if you are in Manipur, Mizoram, Nagaland or Tripura (CGST Act section 22). Aggregate means everything you supply across India under your PAN, not one property. Registration is per state: a host with a villa in Goa and a homestay in Coorg needs a GST registration in each state (section 25).

The rates since 22 September 2025

• Up to and including ₹7,500 per room per night: 5%, and you cannot claim input tax credit on those rooms. You cannot choose 18% with credit instead.
• Above ₹7,500 per room per night: 18%, with input tax credit.
• The slab follows the price you actually charge for that room that night, not a rack rate.
• There is no exemption below ₹1,000 any more; it was withdrawn in July 2022.

The edge at ₹7,500 is sharp. A room at ₹7,600 is taxed at 18% on the whole ₹7,600, so the guest pays ₹8,968 against ₹7,875 for a room at ₹7,500. Nudging a price just over the line costs your guest far more than it earns you, which is why StayBind's pricing keeps prices clear of it.

Always CGST and SGST, never IGST

A stay is supplied where the property is (IGST Act section 12(3)). So a guest from another state, or a company registered in another state, still pays the CGST and SGST of your property's state. IGST never appears on a room invoice, and the invoice has to go out under your registration in the state where the property is.

All-in prices or GST on top

If you quote one price and do not add GST to it, the tax is inside that price, and it is taken out rather than added (CGST Rule 35): tax = price × rate ÷ (100 + rate). A ₹5,250 room at 5% is ₹5,000 of room and ₹250 of GST. One trap: an all-in price between ₹7,875 and ₹8,850 cannot be split cleanly at all, because taking 5% out leaves more than ₹7,500 and taking 18% out leaves less. Keep all-in prices out of that range.

What a valid invoice needs

Rule 46 of the CGST Rules lists what a tax invoice carries. The ones hosts most often get wrong:

• Your name, address and GSTIN.
• A consecutive invoice number of at most 16 characters, unique within the financial year. "GST/2026-27/000001" is 18, so it is too long; "GST/26-27/00001" fits.
• The service code, SAC 996311, and the taxable value, rate and CGST and SGST amounts.
• For a business guest: their name, address and GSTIN.
• For anyone else: their name and address once the taxable value reaches ₹50,000.
• Issue it within 30 days of the stay (Rule 47).

A business guest registered in your state can claim the GST on your invoice as input credit. One registered in another state cannot use your state's CGST and SGST, which is a question about their books, not a reason to charge IGST.

Cancellations and refunds

A cancellation charge you keep is taxed at the same rate as the stay it was for (CBIC Circular 178/10/2022). If you refund a stay you already invoiced, issue a credit note: it only reduces your tax if it is declared by 30 November after the end of the financial year (CGST Act section 34).

The composition scheme

With turnover up to ₹50 lakh you can opt to pay 6% of turnover instead (Notification 2/2019-Central Tax (Rate)), subject to its conditions. You then issue a bill of supply, not a tax invoice, and you cannot charge GST to your guests.

Where StayBind fits

GST invoices for your guests are coming soon to StayBind: add your GST details once and it will issue the tax invoice for a booking in your name, with the right slab, CGST and SGST split out of what the guest paid, a number inside the 16-character limit, and a refusal with the reason when something the law requires is missing. Today StayBind records every payment and cash entry on its booking, so you have the figures for your own invoices. See payments and pricing.

This reflects the law as of September 2026. It is a guide, not advice for your particular situation.