Hostel Rent less than Rs.1000/- per day per student exempted under GST

Last updated: 10 September 2021

Court :
Maharashtra Authority of Advance Ruling (MAAR)

Brief :
In M/s. Ghodawat Eduserve LLP [Order No. GST-ARA-72/2019-20/B-51 dated August 27, 2021], M/s. Ghodawat Eduserve LLP ("the Applicant") has sought clarification on the issue as to whether there lies any exemption on the service of providing hostel on rent to students under S no. 12 or S no. 14 of the Notification No. 12/2017- Central Tax (Rate) dated June 28, 2017 ("Services Exemption Notification") under GST.

Citation :
Order No. GST-ARA-72/2019-20/B-51 dated August 27, 2021

In M/s. Ghodawat Eduserve LLP [Order No. GST-ARA-72/2019-20/B-51 dated August 27, 2021], M/s. Ghodawat Eduserve LLP ("the Applicant") has sought clarification on the issue as to whether there lies any exemption on the service of providing hostel on rent to students under S no. 12 or S no. 14 of the Notification No. 12/2017- Central Tax (Rate) dated June 28, 2017 ("Services Exemption Notification") under GST.

The Hon’ble Maharashtra Authority of Advance Ruling ("MAAR") noted that the Applicant is providing facility of hostel by charging students Rs. 34,000/- per annum i.e. Rs. 95/- per day per room in addition to coaching fees. The contention put forth by the Applicant of covering the service under "residential dwelling" under S no 12 of the Service Exemption Notification is not satisfied as there lies no restriction of preparing own food, stay of family members and the food is not provided by the owners in residential dwellings. Such is not the case in the current hostel service provided by the Applicant.

Further noted, considering the clarification given in Circular No. 32/06/2018-GST dated February 12, 2018, the hostel facility provided to students can be included in the provisions of S no. 14 of the Services Exemption Notification which mentions Services by hotel, inn, etc., by whatever name called for residential or lodging purposes, thereby making the same exempt from taxes.