Getting GST Credit on Staff Travel and Hotel Bills: Why Most Businesses Lose It
Hotel GST is charged in the state where the hotel is, so credit is usable only by your GSTIN in that state, and only if the invoice carries it. Air tickets may give credit with the right invoice. Meals and holiday travel are blocked. Give employees your GSTINs and check invoices before reimbursing.
Sales and service teams travel constantly. The GST on their hotels, flights and cabs adds up to lakhs a year. Most of it is lost, either because the invoice does not carry the company's GSTIN or because of where the tax is charged.
Hotels: the place-of-supply problem
For accommodation, the place of supply is where the hotel is. A Mumbai hotel charges Maharashtra CGST and SGST, even if your company is in Gujarat.
- ✓If your company has a GSTIN in Maharashtra, that GSTIN can claim the credit, provided the invoice carries it.
- ✓If it does not, the Gujarat GSTIN cannot use Maharashtra CGST and SGST. The credit is lost.
What you can claim
| Expense | Credit possible? | Condition |
|---|---|---|
| Hotel in a state where you are registered | Yes | Invoice in that state's GSTIN |
| Hotel in a state where you are not registered | Generally no | |
| Air tickets for business travel | Often yes | Airline invoice with your GSTIN; credit depends on the class and rate |
| Cab services through apps | Depends on the rate charged | Some rates come without credit |
| Meals and food | No | Blocked |
| Travel for employee holidays | No | Blocked |
How to collect valid invoices
- Give employees your GSTINs for each state, and ask them to provide the right one at check-in and when booking flights.
- Book through a corporate travel desk or a booking tool that adds the GSTIN automatically.
- Download airline GST invoices from the airline's portal using the PNR.
- Check the invoice before reimbursing: GSTIN, name, state.
- Reconcile with GSTR-2B. The hotel or airline must report the invoice for you to claim.
A worked example
A Gujarat-based company with branches in Maharashtra and Karnataka spends ₹24 lakh a year on hotels, with ₹2.9 lakh GST. Previously, every invoice was in the employee's name. Now employees give the branch GSTIN where one exists. About 70% of stays are in those states, so roughly ₹2 lakh of credit is recovered a year. Stays in other states remain a cost.
Frequently asked questions
Can we claim credit if the invoice is in the employee's name?
No. The invoice must carry your GSTIN.
Should we register in every state our staff visit?
Not just for travel credit. Registration has compliance costs.
Is GST on a conference fee in another state claimable?
It depends on the place of supply of that service. Check the rules for events.
Sources
This is a summary, not legal advice. Confirm with your chartered accountant.
Written by
Founder, Airwix Technologies (Sleet)
Vatsal Sutariya is the founder of Airwix Technologies in Ahmedabad, the company that builds Sleet: SleetHR for HR and payroll, and Sleet Accounting for GST billing and books. He writes about GST, invoicing, business tax and choosing software for Indian businesses, and checks each rule against the official notification before it is published.
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