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Declaration for 18% GST for restaurants-Notification issued!

CBIC has issued Notification No. 05/2025 and Notification No. 08/2025, on 16th January 2025. These amendments focus on the omission of the “declared tariff” definition and a shift towards linking GST rates for accommodation and restaurant services to the actual value of supply. The notifications also specify the requirement of declaring the taxpayer as “specified premises”.

Let’s understand the changes!

Notification No. 05/2025 - Central Tax (Rate) dated 16.01.2025:

MINISTRY OF FINANCE

DEPARTMENT OF REVENUE

Date: 16.01.2025

Notification No. 05/2025 - Central Tax (Rate)

G.S.R. 38(E).- In exercise of the powers conferred by sub-section (1), (3), and (4) of section 9, sub-section (1) of section 11, sub-section (5) of section 15 and section 148 of Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council, hereby makes the following further amendments in the notification number 11/2017-Central Tax (Rate), of the Government of India, in the Ministry of Finance (Department of Revenue), published in the Gazette of India, Extraordinary, Part II, section 3, sub-section (i), vide number G.S.R. 690(E), dated the 28th June, 2017, namely:-

In the said notification, -

(i) In paragraph 4 relating to Explanation, with effect from the 1st day of April 2025,-

(a) Clause (xxxv) shall be omitted;

(b) For clause (xxxvi), the following clause shall be substituted, namely:-

" (xxxvi) "Specified premises", for a financial year, means,-

(a) A premises from where the supplier has provided in the preceding financial year, 'hotel accommodation' service having the value of supply of any unit of accommodation above seven thousand five hundred rupees per unit per day or equivalent; or

(b) A premises for which a registered person supplying 'hotel accommodation' service has filed a declaration, on or after the 1st of January and not later than 31st of March of the preceding financial year, declaring the said premises to be a specified premises; or

(c) A premises for which a person applying for registration has filed a declaration, within fifteen days of obtaining acknowledgment for the registration application, declaring the said premises to be a specified premises;";

(ii) After Annexure VI, the following Annexures shall be inserted, namely:-

"Annexure VII

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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 ...(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 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

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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

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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.".

[F. No. 190354/2/2025-TO (TRU-II)]

MD. ADIL ASHRAF, Under Secy.

Note: -The principal notification number 11/2017-Central Tax (Rate) was published in the Gazette of India, Extraordinary, vide number G.S.R. 690 (E), dated the 28th June, 2017 and last amended vide notification number 07/2024-Central Tax (Rate) published in the Gazette of India vide number G.S.R. 617(E), dated the 8th October, 2024.

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Notification No. 08/2025 - Central Tax (Rate) dated 16.01.2025:

MINISTRY OF FINANCE

DEPARTMENT OF REVENUE

Date: 16.01.2025

Notification No. 08/2025 - Central Tax (Rate)

G.S.R. 47(E).-In exercise of the powers conferred by sub-section (5) of section 9 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council, hereby makes the following further amendments in the notification number 17/2017- Central Tax (Rate), of the Government of India, in the Ministry of Finance (Department of Revenue), published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 696(E) dated the 28th June, 2017, namely:-

1. In the said notification, in the Explanation, for item (c), the following shall be substituted, namely,-

" "specified premises" has the same meaning as assigned to it in clause (xxxvi) of paragraph 4 of notification number 11/2017-Central Tax (Rate) dated 28.06.2017.".

2. This notification shall come into force with effect from the 1st day of April, 2025.

[F. No. 190354/2/2025-TO (TRU-II)]

MD. ADIL ASHRAF, Under Secy.

Note: -The principal notification number 17/2017 -Central Tax (Rate), was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 696(E), dated the 28th June 2017 and was last amended by notification number 16/2023-Central Tax (Rate), published in the Gazette of India, Extraordinary, vide number G.S.R. 771(E), dated 19th October 2023.

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Key Highlights

Clause (xxxv) of explanations para of Notification number 11/2017-Central Tax (Rate) is omitted. It contained a definition of “declared tariff” w.r.t. deciding whether a restaurant is in specified premises or not. This amendment is to give effect to the change that the GST rate will be decided based on the actual tariff charged in the preceding financial year.
Clause (xxxvi) of explanations para of Notification number 11/2017-Central Tax (Rate) is changed as follows:

"(xxxvi) "Specified premises", for a financial year, means,-

(b) A premises for which a registered person supplying 'hotel accommodation' service has filed a declaration, on or after the 1st of January and not later than the 31st of March of the preceding financial year, declaring the said premises to be a specified premises; or

The earlier definition was as follows:

“(xxxvi) "Specified premises" means premises providing "hotel accommodation" services having declared tariff of any unit of accommodation above seven thousand five hundred rupees per unit per day or equivalent.”

This amendment specifies the following points:

Specified premises will be decided on the basis of the actual tariff charged in the preceding FY and not on the basis of the declared tariff.
Additionally, a registered person can file a declaration to declare the said premises to be specified premises before the end of FY or within 15 days of registration to avail 18% GST with ITC. This option is available for restaurants in hotels having a tariff of up to Rs.7,500/- or less. They can continue to pay GST @ 5% without ITC or opt for 18% GST with an ITC claim by filing the said declaration.
If a registered person wants to opt-out from 18% GST and come back to 5% GST without ITC, he should file an opt-out declaration.

All these changes are applicable w.e.f. 01^st April 2025.

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Conclusion

In conclusion, the recent notifications—No. 05/2025 and No. 08/2025—mark a significant shift in how GST rates are determined for restaurant and hotel accommodation services. By eliminating the "declared tariff" concept and basing GST applicability on the actual value of supply from the preceding financial year, the government aims to bring greater transparency and alignment with real pricing. Furthermore, the introduction of the "specified premises" declaration offers flexibility to taxpayers, allowing them to choose between 18% GST with ITC or 5% GST without ITC, depending on their business needs.

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