The Maharashtra Authority of Advance Ruling (AAR) ruled that Goods and Service Tax (GST) is exempted on Hostel Rent of less than Rs. 1000 per day per Student.
The applicant, M/s. Ghodawat Eduserve LLP is providing commercial training and coaching service for students appearing for 11th and 12 th standards who are desirous of appearing for I IT, etc., specifically in the science stream. It is also providing hostel facilities to the student’s on-demand basis and charging them additionally. The service of the hostel is optional and does not come in the form of a package. The hostel provides basic residential facilities, required to stay and study which include well-maintained furnished residence, Light, water, etc., and in consideration, the hostel charges a nominal lump-sum fee of Rs. 34,000/- per year per student i.e. Rs. 95/- (Approx.) per day. The hostel is also available for the students learning in the schools nearby.
The applicant has sought the advance ruling on the issue of whether the activity of providing the hostel on rent to various students by the applicant is exempt (where hostel fees charged per student per day is much less than Rs. 1000/-); and if is it exempt it shall be claimed as exempt under Serial Number 12 or Serial Number 14 of Notification No. 12/2017- Central Tax (Rate) (as amended time to time) dated June 28, 2017.
The Coram of members Rajiv Magoo and T.R.Ramnani ruled that exemption under Sr. No. 14 is available for services provided by a hotel, inn, guest house, club, or campsite, by whatever name called, for residential or lodging purpose, having a value of supply of a unit of accommodation below Rs.1000/- per day or equivalent.
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