Notification No. 8/2017-Integrated Tax (Rate)

What it does

The Integrated Goods and Services Tax Act, 2017 leaves the rate of tax to be notified. Notification No. 8/2017-Integrated Tax (Rate), issued by the Ministry of Finance (Department of Revenue) on 28 June 2017, is the notification that does this for services. It lists the services by description and, against each, states the rate of integrated tax and the conditions on which it applies.

It runs in parallel with the central tax rate notification for services, Notification No. 11/2017-Central Tax (Rate) of the same date, in which accommodation, food and beverage services are at serial number 7 of the table. A service supplied within a State is charged under the central and State Acts at the rates in the central and State notifications, and a service supplied between States is charged to integrated tax at the rate in this one. The integrated rate is the sum of the central and State rates, so an amendment to one is made to the other in step.

Who it binds

The supplier of a service in the course of a supply between States or on an import of services, and the recipient where the tax is payable by the recipient. It also binds the department, since the rate it prescribes is the one an officer may demand. It is a notification and not an Act, so it can be amended and it is read together with the Act and with the explanatory entries it carries.

What has changed, and when

Notification No. 8/2017-Integrated Tax (Rate) has been amended many times. The amendment relevant to the hotel trade is Notification No. 15/2025-Integrated Tax (Rate) of 16 September 2025, which amends this notification from 22 September 2025 and makes the matching change to the one in the central tax series. From that date a hotel room with a value of supply of up to INR 7,500 per unit per day is taxed at 5 per cent, on condition that the hotel takes no input tax credit on the goods and services used to supply it, and the hotel cannot choose a higher rate instead.

What turns on it in practice

The point is the condition. A rate in a notification applies only if the conditions in the same entry are met, so a hotel that takes a credit while charging the lower rate has not complied with the entry. The lower rate then fails and the dispute is about the tax that should have been charged. For a hotel that has several kinds of supply, the question is which entry covers each, since room rental, restaurant service and outdoor catering are separate entries with separate conditions.

The restaurant in the same building follows a different test, the specified premises rule in force since 1 April 2025, and the answer for it is not the answer for the rooms. A hotel business and its advisers need to read the entry, the condition and the date, and to check whether the supply was made before or after 22 September 2025, because the rate for earlier periods is decided by the notification as it then stood.

Questions of this kind are part of the advisory and litigation work in goods and services tax of this practice, which is concerned with rate, classification and the consequence of a condition not being met.