GST exempt on hostel rent under Rs. 1000 per day per student: AAR

Maharashtra Advance Ruling Authority (AAR) has ruled that Goods and Services Tax (GST) is exempt on hostel rent below Rs. 1000 per day per student.

The plaintiff, M/s. Ghodawat Eduserve LLP offers business training and coaching service to students appearing for 11th and 12th standards who wish to appear for I IT etc. especially in the science stream. It also provides hostel facilities at the request of students and charges for them additionally. The hostel service is optional and does not come as a package. The hostel provides basic residential facilities, necessary for staying and studying, which include a well-maintained furnished residence, light, water, etc., and in return, the hostel charges a nominal flat fee of Rs 34,000/- per year per student i.e. Rs. 95/- ​​(approximately) per day. The hostel is also available for students studying at nearby schools.

The applicant requested the advance ruling on whether the activity of providing the hostel for rent to various students by the applicant is exempt (when the hostel fee charged per student per day is well below Rs .1000/-); and if exempt, it will be claimed as exempt under serial number 12 or serial number 14 of Notice No. 12/2017 – Central Tax (Rate) (as amended from time to time) dated 28 June 2017.

The Coram of Members Rajiv Magoo and TRRamnani has ruled that exemption under Sr. No. 14 is available for services provided by a hotel, inn, guest house, club or campsite, regardless of his name, for residential or accommodation purposes, having a supply value of an accommodation unit of less than Rs.1000/- per day or equivalent.

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Linda G. Ibarra