The GST Specified Premises Declaration 2025-26 has introduced a critical procedural shift for India's hospitality industry. Under Notification No. 05/2025 – Central Tax (Rate) dated January 16, 2025, hotels and restaurants must now electronically file declarations to determine their GST rate structure and Input Tax Credit (ITC) eligibility. This change affects how hotel accommodation and in-house restaurant services are taxed, moving from the old "declared tariff" system to actual transaction value-based taxation.
With the GST Network (GSTN) digitizing this process effective January 1, 2026, hotel owners and restaurateurs must understand the opt-in mechanism, filing deadlines, and tax implications. Missing the March 31, 2026 deadline for existing taxpayers could mean losing significant ITC benefits for an entire financial year.
Understanding Specified Premises Under GST
A specified premise refers to hotel or accommodation establishments where specific GST rules apply based on room tariff thresholds. The new guidelines effective from April 1, 2025 have eliminated the concept of "declared tariff" and replaced it with actual transaction value for tax calculation purposes.
A premise automatically becomes "specified" if it charged more than ₹7,500 per night for any accommodation unit in the preceding financial year. However, hotels charging lower rates can voluntarily opt-in as specified premises to enable their in-house restaurants to charge 18% GST with full ITC benefits, which can be financially advantageous for establishments with high operational costs.
GST Rate Structure for Hotels and Restaurants
The primary advantage of filing a specified premises declaration lies in the differential tax treatment for restaurant services. The choice between 5% and 18% GST significantly impacts both tax liability and ITC availability.
| Premise Status | Restaurant GST Rate | Input Tax Credit (ITC) | Best For |
|---|---|---|---|
| Not Specified | 5% | No ITC Available | Low-overhead operations, minimal input costs |
| Specified Premise | 18% | Full ITC Available | High-investment outlets, premium kitchens, significant input purchases |
Hotels with substantial investments in kitchen equipment, furniture, raw materials, and services may find the 18% GST with ITC more beneficial as they can offset input taxes paid on purchases. According to ClearTax analysis, this can result in lower effective tax burden for premium establishments despite the higher nominal rate.
Annexure VII and VIII Filing Requirements
The GST portal has introduced two specific annexures depending on your registration status. Understanding which form applies to your business and the associated deadlines is crucial for compliance.
Annexure VII: For Existing Registered Taxpayers
Existing hotels and accommodation providers registered under GST who wish to opt-in for specified premises status must file Annexure VII. The filing window is strictly limited to January 1 to March 31 preceding the financial year for which the declaration applies.
- Filing Period: January 1, 2026 to March 31, 2026 (for FY 2026-27)
- Applicability: Takes effect from the subsequent financial year
- Important Note: Hotels that filed manual declarations for FY 2025-26 must re-file electronically via Annexure VII between Jan-Mar 2026
- Continuity: Once filed, the status automatically renews for future years unless you opt-out using Annexure IX
Annexure VIII: For New GST Registrants
Businesses applying for fresh GST registration can declare their premises as specified during the registration process itself using Annexure VIII.
- Filing Window: Within 15 days of generating ARN (Acknowledgment Reference Number)
- Effective Date: Status becomes active from the date of registration approval
- Alternative Option: If the 15-day window is missed, filing can only be done during the annual Annexure VII period (January-March)
Step-by-Step Online Filing Process
The manual declaration era has ended. As per GSTN advisory dated January 4, 2026, all specified premises declarations must be filed electronically through the official GST portal.
- Login to GST Portal: Visit www.gst.gov.in and access your registered dashboard
- Navigate to Declaration Section: Click Services → Registration → Declaration for Specified Premises
- Select Appropriate Annexure: Choose Annexure VII (existing taxpayers) or Annexure VIII (new registrants)
- Select Premises: You can declare up to 10 premises in a single filing; additional declarations may be filed for remaining premises
- Verify and Submit: Use your EVC (Electronic Verification Code) or Digital Signature Certificate (DSC) to authenticate
- Download Acknowledgment: The system generates a unique reference number and separate downloadable PDF for each premise
- Email/SMS Confirmation: All authorized signatories receive confirmation upon successful filing
Critical Compliance Deadlines and Rules
Adhering to filing timelines is non-negotiable under the new specified premises framework. According to Taxmann's GST analysis, missing deadlines can result in unfavorable tax treatment for the entire financial year.
| Taxpayer Category | Form Required | Filing Window | Applicable For |
|---|---|---|---|
| Existing Registered Hotels | Annexure VII | January 1 - March 31, 2026 | FY 2026-27 |
| New GST Registrants | Annexure VIII | Within 15 days of ARN | From registration date onwards |
| Hotels Opting Out | Annexure IX | January 1 - March 31 | Next FY (to be enabled soon) |
Key Compliance Points
- Automatic Renewal: Once you opt-in, specified premises status continues automatically for subsequent years without annual refiling
- No Mid-Year Changes: Missing the March 31 deadline means you cannot opt-in during the financial year
- Eligibility Restrictions: Not available to Composition Taxpayers, TDS/TCS taxpayers, SEZ units/developers, or cancelled registrations
- Separate Declaration Required: Each premise must have its own declaration; one filing can cover up to 10 premises with individual PDFs generated
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Financial Impact Analysis
The decision to opt-in as a specified premise requires careful financial evaluation. Hotels must analyze their input tax credit potential against the higher GST rate to determine the optimal tax structure.
When Opting In Makes Sense
- Annual capital expenditure on kitchen equipment, furniture, and infrastructure exceeds ₹10 lakh
- High-volume purchases of raw materials, consumables, and supplies with GST component
- Significant service costs (maintenance, consulting, professional services) attracting GST
- Premium positioning with ability to absorb or pass on marginally higher prices
When 5% GST May Be Better
- Low overhead operations with minimal capital investments
- Budget or economy segment hotels with price-sensitive customers
- Restaurants sourcing primarily from unorganized sectors (no GST on purchases)
- Limited service costs and equipment purchases
Frequently Asked Questions
What happens if I miss the March 31, 2026 deadline for Annexure VII?
If you miss the deadline, you cannot opt-in as a specified premise for FY 2026-27. You will have to wait until the next filing window (January-March 2027) to declare for FY 2027-28. During this period, your restaurant services will default to 5% GST without ITC.
Can I opt-out after declaring as a specified premise?
Yes, hotels can opt-out by filing Annexure IX during the January-March window preceding the financial year. This facility is expected to be enabled on the GST portal soon. Once opted out, you revert to 5% GST without ITC for restaurant services.
Do I need to file Annexure VII every year?
No. Once you file Annexure VII and become a specified premise, the status automatically continues for subsequent financial years. You only need to file again if you wish to opt-out using Annexure IX.
What if my room tariff exceeds ₹7,500 per night?
Your premise automatically becomes a specified premise for the current financial year without needing to file any declaration. However, you should still file Annexure VII to ensure proper documentation and compliance records.
Can I declare multiple hotel properties in one application?
Yes, you can select up to 10 premises in a single filing. However, the system generates separate reference numbers and PDFs for each premise individually. If you have more than 10 properties, you must file additional declarations.
Is this facility available for standalone restaurants?
No. This declaration facility is specifically for hotel accommodation service providers. Standalone restaurants (not within hotel premises) continue to charge 5% GST without ITC as per existing rules.
Key Takeaways
- Mandatory electronic filing of specified premises declarations via GST portal from January 1, 2026
- Critical deadline: March 31, 2026 for existing taxpayers to file Annexure VII for FY 2026-27
- Hotels charging above ₹7,500 per night automatically become specified premises
- 18% GST with full ITC for specified premises vs 5% GST without ITC for non-specified
- Up to 10 premises can be declared in single filing with individual PDFs generated
- Automatic renewal of status for subsequent years unless opted out via Annexure IX
- New registrants have only 15 days from ARN to file Annexure VIII
Disclaimer
This article is for informational purposes only and does not constitute financial, tax, or legal advice. GST regulations are subject to amendments and updates by government authorities. Hotel and restaurant owners should consult qualified tax professionals or GST practitioners before making opt-in decisions. Verify all filing deadlines and requirements on the official GST portal (www.gst.gov.in) before submission.
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