GST and Cash Rules for Wedding Businesses in 2026: Caterers, Banquet Halls, Decorators and Photographers, the Rs 2 Lakh Limit

Wedding businesses cannot accept Rs 2 lakh or more in cash for one wedding, and caterers, halls and decorators each charge GST at different rates.

Kalpeshbhai runs a party plot with in-house catering on the edge of Junagadh. The wedding season brings 40 bookings in three months, most families pay a large part in cash, and he bills one lump-sum "package" with no GST break-up. Last year a family paid Rs 4.5 lakh in cash across the advance and the final settlement, and his new accountant has told him that alone can attract a penalty of the same amount.

From Tulsi Vivah in November to February, caterers, banquet halls, decorators, photographers and event planners earn most of their year. The cash and GST rules hit them hardest in exactly these months. Here is what applies in 2026, for the businesses and for the families paying them.

In short: A wedding business cannot receive Rs 2 lakh or more in cash from one person for one event or occasion, counting advances and the final payment together; the penalty equals the cash received. Outdoor catering is taxed at 5% without input tax credit, while renting a hall or party plot, decoration, sound, photography and event management are generally taxed at 18%. Hotel rooms for guests are taxed at 5% up to Rs 7,500 a night and 18% above. GST on a service is due when an advance is received, not only when the wedding happens. A service business needs GST registration once its turnover crosses Rs 20 lakh a year. Families paying a single contractor more than Rs 50 lakh in a year must deduct 2% TDS, and gifts received by the couple at the wedding are tax-free.

Our team handles GST registration, billing, returns and income tax for event and catering businesses. The details are at the end of this guide.

The Rs 2 lakh cash rule for weddings

• One occasion counts as one: the law bars receiving Rs 2 lakh or more in cash from a person for transactions relating to one event or occasion. A wedding is exactly that, so the advance, the balance and any extras are added together.
• The penalty: a sum equal to the cash received, charged on the business that receives it, not the family.
• Splitting does not help: separate bills for hall, food and decoration for the same wedding still count together if paid in cash by the same family.
• The fix: take cash below Rs 2 lakh per wedding and the rest by UPI, card, cheque or bank transfer. See cash transaction limits.

GST rates on wedding services

• Outdoor catering: 5%, without input tax credit.
• Hall, banquet or party plot rent: 18%, with credit.
• Decoration, lighting, sound, photography and event management: generally 18%.
• Hotel rooms for guests: 5% without credit where the room tariff is up to Rs 7,500 a night, and 18% above that.
• Packages: a single package of hall, food and decoration is taxed at the rate of its main element, which is where most disputes start. Bills that show each service and its rate are easier to defend. Our guide to GST for restaurants, hotels and caterers covers food services in more detail.

Registration, advances and returns

• Registration: needed once turnover from services crosses Rs 20 lakh in a year in Gujarat. See do I need GST registration.
• Advances: GST on a service is due on the date the advance is received, so a booking taken in August for a December wedding is reported in August.
• Cancellations: if a booking is cancelled and the advance refunded, the tax adjustment is made through a credit note.
• Returns: GSTR-1 and GSTR-3B every month or quarter. See our GST return calendar.

Income tax for the business

• Record every booking: cash and digital receipts both go into the books. Large unexplained cash deposits during the season are a common trigger for notices.
• Presumptive tax: smaller businesses can declare 6% of digital and 8% of cash turnover as profit, within the limits. See our guide to presumptive taxation.
• Corporate events: companies booking your hall or catering deduct TDS, which you claim back in your return.

For families paying for a wedding

• Pay big bills digitally: it protects the vendor from the cash penalty and gives you a clean record.
• Hotel bills: paying a hotel or restaurant more than Rs 50,000 in cash at one time requires your PAN.
• Very large weddings: an individual paying one contractor, planner or professional more than Rs 50 lakh in a year must deduct 2% TDS using a PAN, even without a business.
• Gifts: gifts received by the bride and groom on the occasion of the marriage are tax-free, whoever gives them. Keep a list. See is a gift taxable.

Back to Kalpeshbhai. This season, each wedding gets a booking form with the family's PAN, the cash part is capped below Rs 2 lakh for the whole wedding, and the rest comes by UPI or bank transfer. His bills now show hall rent at 18% and catering at 5% separately, GST on each advance is paid in the month it is received, and his GST registration and returns are in order before the first booking.

How we help

• GST registration and the right rate for each wedding service
• Booking forms, bill formats and advance tracking
• Monthly GST returns and reconciliation
• Cash limit checks and staff instructions for the season
• Income tax returns, presumptive tax or audit
• Replies to notices about cash deposits or GST

Gadhia Associate has been in practice since 2007 and has handled work for over 7,000 clients, with a 5.0 Google rating from more than 100 reviews. Caterers, party plots, hotels and event businesses from Junagadh, Rajkot, Jamnagar, Porbandar and Veraval come to our Junagadh office, where same-day appointments are available. Work for businesses elsewhere is handled online.

Wedding season bookings coming in? Get your GST and cash rules set up before the first function. Call or WhatsApp +91 82005 28355, or message us on WhatsApp. The first consultation is free.

Frequently asked questions

How much cash can a caterer or banquet hall accept for one wedding?

Less than Rs 2 lakh in total from a person for that wedding, counting the advance and the balance. Above that, the penalty equals the cash received.

What is the GST on outdoor catering for a wedding?

5%, without input tax credit.

What is the GST on renting a banquet hall or party plot?

18%, with input tax credit.

Is GST payable on the advance for a wedding booking?

Yes. For services, GST is due when the advance is received.

Do families need to deduct TDS on wedding payments?

Only if an individual pays one contractor or professional more than Rs 50 lakh in a year, in which case 2% TDS applies.

Are wedding gifts taxable for the bride and groom?

No. Gifts received on the occasion of the marriage are tax-free, whatever the amount and whoever gives them.

Position as of 19 October 2026. GST rates are as notified from 22 September 2025, and the income tax rules described continue under the Income-tax Act, 2025. Rates for mixed packages depend on the facts, so take advice on your own billing.