GST on Banquet Hall: Rate, SAC Code & Tax Rules for Indian Venue Owners (2026 Guide)

Under the Central Goods and Services Tax (CGST) framework, the tax rate for banquet venue services is determined by whether food is bundled and whether the property constitutes 'specified premises':

Indian GST intelligence directorates regularly penalize banquet operators for five common billing errors:

• 1. Illegal Rate Splitting to Evade Composite Supply Rules: Artificially splitting a single bundled wedding package into 18% hall rent and 5% food to bypass tax rules. Section 8 of the CGST Act mandates that composite supplies must be taxed as a single unified service.
• 2. Unreported Advance Booking Tokens: Failing to issue a formal Receipt Voucher under Section 31(3)(d) upon collecting booking advances. GST liability arises on the date the advance token is received, not on the event date.
• 3. Charging GST on Refundable Security Deposits: Security deposits collected purely to cover potential property breakage are non-taxable deposits. GST is charged only if a portion of the deposit is forfeited post-event.
• 4. Omitting Client GSTIN on Corporate B2B Invoices: Corporate clients require valid 15-digit GSTIN details and correct state codes to claim ITC in their GSTR-2B.
• 5. Improper Input Tax Credit (ITC) Claims on 5% Bundled Packages: Claiming ITC on kitchen equipment or commercial inputs when operating under the mandatory 5% non-specified catering rate is prohibited under Section 17(5).

To ensure audit-proof accounting, venue operators must distinguish between two standard contracting formats:

A frequent point of confusion among venue owners is whether non-air-conditioned banquet halls or open-air marriage lawns enjoy a lower tax rate:

1. 1
   Uniform Application of Notification 20/2019: Under current GST law, tax rates do not distinguish between AC and non-AC facilities. Pure hall rentals attract 18% under SAC 997212, and bundled catering at non-specified venues attracts 5% under SAC 996331, whether air-conditioned or non-AC.
2. 2
   Utility Submeter Pass-Through: If a banquet hall charges separately for electricity or generator diesel consumption as part of the venue rental contract, these utility charges form part of the composite supply and follow the tax rate of the principal supply.

Taxation rules for traditional marriage halls and charitable institutions:

• Commercial Kalyana Mandapams: Privately owned Kalyana Mandapams follow standard GST rules (18% for pure hall leasing under SAC 997212; 5% for bundled food packages under SAC 996331).
• Charitable Trust Exemption Threshold: Under Notification No. 12/2017-Central Tax (Rate) (Entry 10), renting of community halls or Kalyan Mandapams owned and managed by an entity registered under Section 12AA or 12AB of the Income Tax Act, 1961 is exempt from GST only if the daily rental fee is less than ₹10,000 per day.
• Breaching the ₹10,000 Cap: If a trust-owned community hall charges ₹10,000 or more per day, the entire rental amount becomes taxable at 18% GST with no partial exemption.

Venura provides an enterprise billing and taxation engine tailored for Indian banquet properties:

• Automated SAC & Tax Determination: Automatically applies SAC 997212 (18% pure lease) or SAC 996331 (5% bundled package / 18% specified premises) based on booking parameters.
• 3-Tier Payment Ledger: Tracks booking tokens, milestone advances, and final balances with automated Section 31(3)(d) GST Receipt Vouchers.
• Instant WhatsApp PDF Invoicing: Sends digitally signed, branded tax invoices directly to clients on WhatsApp with UPI QR payment links.
• Tally Prime Direct XML Integration: Exports clean monthly sales journals and tax ledgers for effortless GSTR-1 and GSTR-3B tax filing.