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Paying guest service

Naveen kumar (Article) (24 Points)

18 February 2017

One of my client is running a paying guest accomodation service, in a rented building, where he provides accomodation along with food and other amenities to his inmates. He is charging around 5 to 7 thousand to his inmates per month individually. His collection in year crosses threshold limit of Rs. 10 lakh in a year, Is service tax is applicable to him?

on verification of negative list under service tax, Renting of a hotel, inn, guest house, club, campsite or other commercial places meant for residential or lodging purpose having declared tariff of a room below rupees one 1,000 per day or equivalent is exempt from service tax. Is Paying guest accomodation is exempted in above rules

Please advice, your valuable advice is highly appreciated.

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3 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160332 Points)
Replied 19 February 2017

No other exemption than renting of room below 1000 P/D. As per his catering services exceeding basic limit he should be liable to service tax.

Naveen kumar (Article) (24 Points)
Replied 19 February 2017

Thanks for reply

He does not charge separately for food or accomodation. Rs. 5 to 7 thousand per month per head which includes all amenities like room rent, food, internet & other amenities. No separate charges are charged other than above amount, Hence, please clarify

JasenFahey (analyst) (31 Points)
Replied 13 June 2018

Naveen I think it is better to look at the issue on the whole rather than individual earnings. According to a custom essay writing that I came across recently tax exemptions are not given to people in such cases. However, you did not mention the number of residents and the expenses that could change the scenario a bit. If his profit is near 10 lakhs than obviously the individual has to pay tax.