FinoPulse #006 · MAY 14, 2026
Your Monthly Dose of GST Intelligence
finoscape.com
Imagine you’re running a hotel business, and suddenly, you’re faced with the reality of GST on hotel accommodations. How would you navigate this change?
As per Notification No. 02/2026…
The GST Council’s decision to remove exemptions on certain services, including hotel accommodations, is expected to have a significant impact on your business. You’ll need to factor in the additional GST cost when pricing your services.
For instance, if you’re a hotel owner, you’ll need to pay GST on your room bookings, which could range from 12% to 28% of your revenue, depending on the type of accommodation.
Let’s say you’re the owner of a 3-star hotel in Ahmedabad, with an average room tariff of Rs 5,000 per night. With the new GST rate of 18%, you’ll need to pay Rs 900 as GST on each room booking, which translates to a significant increase in your tax liability.
Our experts recommend that you review your pricing strategy to ensure that you’re passing on the GST cost to your customers.
- Review your pricing strategy
- Update your invoicing system
- Notify your customers about the GST change
What it says: ITC reversal is the process of reversing the input tax credit claimed on goods or services that are not used for business purposes.
What it means: You’ll need to reverse the ITC claimed on marketing overheads that are not directly related to your business.
When it applies: ITC reversal applies to all businesses that claim ITC on goods or services.
Common mistakes: Failing to reverse ITC on time, not maintaining proper records, and not notifying the GST authorities.
New GST rates for certain goods and services effective May 1, 2026.
The new rates are expected to have a significant impact on your business, so it’s essential to review your pricing strategy.
The GST Council has announced new rates for certain goods and services, effective May 1, 2026.
You’ll need to update your invoicing system to reflect the new rates.
GSTR-2B reconciliation is a critical step in ensuring that you’re claiming the correct input tax credit.
Failing to reconcile GSTR-2B can result in incorrect ITC claims, which can lead to penalties and fines.
What is the purpose of ITC reversal under GST?
Finoscape Team
India’s Tax Intelligence Hub