Maharashtra AAR: No GST on Hostel Rent of up to Rs.1,000 per Day

The Maharashtra Authority of Advance Ruling (AAR) ruled that Goods and Service Tax (GST) is exempted on hostel rent of less than Rs.1,000 per day per student.

M/s.Ghodawat Eduserve LLP (applicant) provides commercial training and coaching service for students desirous of appearing for IIT, etc. The applicant is also providing hostel facilities to the student’s on a demand basis and charging them additionally. The service of the hostel is optional and does not form part of a package.

The hostel provides residential facilities for stay and study, including well-maintained furnished residences, water, light, etc. In consideration, the hostel charges a lump-sum fee of Rs.34,000 per year per student, which comes to Rs.95 (approx.) per day. This hostel is also available for the students learning in the other schools nearby.

The applicant has sought an advance ruling on whether the activity of providing the hostel on rent to students by the applicant is exempt as the hostel fees charged per day per student is much less than Rs.1,000. Also, whether they can claim an exemption under Serial Number 12 or Serial Number 14 of Notification No. 12/2017- Central Tax (Rate) dated June 28, 2017.

The members of AAR ruled that exemption under Serial Number 14 is available for services provided by a hotel, guest house, inn, club, or campsite, by whatever name called, for lodging or residential purpose, having a value of supply of a unit of accommodation below Rs.1,000 per day or equivalent. Hence, the hostel rent of up to Rs.1,000 per day per student is exempted from GST.

For any clarifications/feedback on the topic, please contact the writer at dvsr.anjaneyulu@cleartax.in