Rent received from the Government Hostel is taxable under GST

Last updated: 28 February 2024

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The Telangana AAR has ruled that rent received from government hostels is taxable under GST. The ruling clarifies that for an exemption to apply, the service must have a direct and immediate link to functions specifically entrusted to municipalities under Article 243W of the Constitution. As renting property was not found to be directly related to these specified functions, the exemption under Notification No. 12/2017-Central Tax (Rate) was denied.

Court :
Telangana AAR

Brief :
The Telangana AAR, in the case of In Re. Navya Nuchu [TSAAR Order No. 05/2024 dated February 09, 2024], held that the act of renting the property to the Schedule Caste Development Department, Government Welfare Departmental Hostels and Government Social Welfare College Boys Hostel ("Government SWCBH") are not qualified for exemption under Notification No. 12/2017-Central Tax (Rate), dated June 28, 2017("the Exemption Notification") because there is no direct relation between the services provided by the Applicant and the functions discharged by the Government SWCBH under Article 243W read with Schedule 12 to the Constitution of India. Therefore, these services do not qualify for exemption under the Exemption Notification.

Citation :
TSAAR Order No. 05/2024 dated February 09, 2024

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1 Year PLAN

1999

(Excl. of GST ₹359)

2 Years PLAN

3499

(Excl. of GST ₹629)

BEST VALUE

3 Years PLAN

4999

(Excl. of GST ₹899)

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Judgement posted by

Bimal Jain

Service

FCA, FCS LLB with21 Yrs of Experience inTaxation Indirect and Direct: Education Qualification: B.Com (Hons) Chartered Accountants Company Secretary LLB Qualified SAP FI/CO Consultants Professional Membership: Chairmanof Indirect Tax Committee of PHD Chamber of Commerce Member of Indirec ... Read more

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