Hostel accommodation to attract 12% GST: AAR

Students will have to shell out more for hostel accommodation as a 12% GST would be applicable on the rent paid, the Authority of Advance Ruling said in two separate cases.

Students will have to shell out more for hostel accommodation as a 12% GST would be applicable on the rent paid, the Authority of Advance Ruling said in two separate cases.

The Bengaluru bench of the Authority of Advance Ruling (AAR) said hostels are not akin to residential dwelling units and hence are not exempt from Goods and Services Tax (GST).

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In an advance Ruling sought by Srisai Luxurious Stay LLP, the AAR said GST exemption was applicable on the accommodation services, of charges up to ₹1,000/- per day, provided by hotels, clubs, campsites etc. till July 17, 2022.

"PG/Hostel Rent paid by inhabitants do not qualify for GST exemption… as the services provided by applicant are not akin to renting of residential dwelling for use as residence," the Bengaluru bench said.

GST on reverse charge will be applicable on the rental to be paid to the landowners by the applicant as the services of the applicant are leviable to GST and thus the applicant has to obtain GST registration, it added.

"… Residential dwelling is a residential accommodation meant for permanent stay and does not include guest house, lodge or like places.