Hostel Rent of Less than Rs 1000 charged from Students exempt from GST

Observations of Advance Ruling Authority:

Hostel room not a Residential Dwelling

• In this scenario, the Hostel room, which is normally shared by three students, is for a time that is usually longer than three months. The rooms at the hostel are exclusively available to students for residential and educational purposes, and only during training and coaching times. These are the main distinctions between a private home and a hostel. As a result, the applicant’s argument that the relevant action is covered by entry No.12 of the abovementioned notification is invalid. As a result, the applicant’s subject activity does not fall under the category of “Residential Dwelling,” and thus the relevant entry Sr. No. 12 of the abovementioned notification is not applicable in this case.

Hostel Rent Less than Rs. 1000 per person per day

• The applicant rents out rooms in a hostel to numerous students at a fee that is significantly less than Rs. 1000 per person per day. As a result, in light of the provisions of notification Entry No. 14, as well as the clarification provided by CBIC in circular No. 32/06/2018-GST dated February 12, 2018, it is determined that the applicant’s activity satisfies the conditions of Entry Sr.no. 14 of said Notification and is thus tax-exempt.

Hostel Fees are not a part of the package related to Couching Services

• Furthermore, because staying in a hostel is voluntary for students, the application has stated that the hostel expenses are not included in the training/coaching fees collected from them. In fact, the hostel expenses are not included in any package relating to the applicant’s commercial training and coaching services. The decision is being made in this sequence, with the applicant’s submissions taken into account.

Authors Comment: Please note that if Hostel Fees were a part of the package related to Couching Services, then GST Rate applicable on Couching Services would have been applicable on Hostel Rent as well.

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