The Uttar Pradesh Authority for Advance Ruling (AAR) has ruled that Hostel accommodation provided to students for residential purpose period from 01/08/2021 to 12/07/2022 is exempted from Goods and Service Tax (GST).
The applicant V S Institute & Hostel Private Limited provides hostel services to students of educational institutions for a fixed term on an annual basis .
The applicant has sought an advance ruling for clarifying the following qusetions that whether hostel accommodation provided by the applicant to the students for residential purposes charging less than 1000 per day during the period from 01/08/2021 to 12/07/2022 is exempted from GST liability.
Before the authority, the applicant submitted that V S Institute & Hostel Private Limited. The applicant engaged in providing the hostel services to the student of education Institutions like share the university GL Bajaj the Arun Acharya GNIT Amity University and several others.
Further the hostel provides residential facilities including food electricity Wi-Fi water etc as inclusive services and the same is covered under the definition of the residential dwelling
The applicant also contends that as per the CBIC in circular number 32 /6/r 2018 -GST dated 12/02/2018 , further clarified and reasserted the exemption of the renting of hostel for residential purpose for less than rupees 1000 per day.
After considering the submissions of the applicant, it was observed by the Authority that the applicant fulfilled the twin conditions to cover under Entry No 12 of the Notification No 12 / 2017 -CT (rate) dated 28/6/ 2017 (exemption notification) namely “services by way of rendering of residential dwelling for you as a residence” issued under the CGST Act 2017 :(a) the building of hostel is residential dwelling , (b) and the hostel is being used for residential of the students.
Further from 1/08/2021 , the applicant has started to provide the hostel service directly to the student of education Institutions without charging tax liability of GST. The students are residing for a fixed amount on an annual basis. it can be inferred the nature of service has not changed from 01/08/2021 only the providers services have changed.
On going through the exemption Entry number 14 of notification No 12/2017 -CT(R) dated 28/06/2017 as well as the CBIC circular No . 32 / 06/2018 GST dated 12th February 2018 it was found that description of service is user based, meaning that, if the accommodation is used for residential or lodging purpose than it is immaterial who the user is.
After reviewing the submissions and provisions, the two member bench of Authority of Advance Ruling, Rajendra Kumar (central Taxes) and Harilal Prajapati (State Taxes) ruled that Hostel accommodation provided to students for residential purpose period from 01/08/2021 to 12/07/2022 is exempted from GST.
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