Whether you choose to stay in a five-star hotel or choose a cheaper option, the rate of the goods and services tax will depend on the room tariff.

The Finance Ministry on Tuesday clarified that GST at 18 per cent will be levied on accommodation in any hotel, including five-star hotels, where the declared tariff per unit is less than Rs 7,500.

“Star rating of hotels is, therefore, irrelevant for determining the applicable rate of GST,” it said, refuting reports that five-star hotels attract 28 per cent GST for a unit of accommodation, irrespective of the declared tariff.