Hotel Meal-Inclusive Tariff Plans Taxable as Composite Supply under GST | AAR

Case Details: Orsino Hotels & Resorts LLP, In re - [2025] 178 taxmann.com 167 (AAR-WEST BENGAL)

Judiciary and Counsel Details

• Jaydip Kumar Chakrabarti & Shafeeq S., Member
• Gaurav Sharma, Authorised Representative for the Applicant.

Facts of the Case

The applicant is engaged in the hotel business, offers various meal-inclusive plans quoting consolidated prices, with invoices reflecting only notional bifurcation between room and food charges. The applicant contended that such meal-inclusive packages constitute a composite supply, with accommodation as the principal supply, and sought to apply separate GST rates for the food component where the combined tariff exceeded ₹7,500 per unit per day. It was further submitted that since the average room tariff per unit per day was below ₹7,500, the applicable GST rate should be 12%, or 18% if the tariff exceeded this threshold. The applicant argued that the invoiced split between room and food was notional, and the total consideration represented a single, indivisible amount for accommodation and meals forming a composite supply. The matter was accordingly placed before the Authority for Advance Ruling (AAR).

AAR Held

The AAR held that the supplies were bundled as a composite supply with accommodation as the principal supply. The ruling emphasized that hotels quoting consolidated prices and non-adjusting prices for skipped meals indicated an indivisible consideration for hotel accommodation services. Therefore, the entire amount should be treated as the value of accommodation services alone. The GST rate must be determined on the total tariff value per unit per day: 12 percent if the tariff is up to Rs. 7,500, and 18 percent if it exceeds Rs. 7,500, with no separate rate applicable to the food component. The ruling is based on Sections 8 and 9 read with Sections 2(30), 2(90), and 98 of the CGST Act and the West Bengal GST Act.