Bombay High Court stays ₹4cr GST demand against hospitality company
The Bombay High Court has temporarily hit pause on a big GST demand against a hospitality company.
The case is about whether restaurants inside pricey hotels (with rooms over ₹7,500 per night) should be taxed at 18%, much higher than the 5% charged at regular standalone restaurants.
For now, the court has stopped tax authorities from taking action over demands topping ₹4 crore for the years 2019-20 to 2024-25.
GST room price linkage contested
The main argument? The current rule links restaurant tax rates to hotel room prices, which doesn't make much sense for customers who just want to eat out.
Advocate Abhishek A Rastogi called this logic unfairly linked, especially since many diners aren't even staying at these hotels.
With travel sites constantly changing room prices, this case could end up shaping how GST works for hotels and restaurants in the future.
The next hearing is set for June.