Madras High Court ruling clarifies that GST does not apply to residential accommodation and food services provided by such hostels to Students and working women.
Why the Exemption?
The key factor lies in the purpose of the accommodation. Renting a residential unit for commercial purposes attracts GST, but private hostels offering rooms and meals primarily serve as a "residential dwelling". This distinction separates them from hotels or serviced apartments, which provide additional amenities and fall under commercial services.
What This Means for Hostels:
This ruling provides relief for private hostels catering to college students and working women. They can now operate without the burden of GST on their services, which typically range from Rs. 1200 to Rs. 6500 per month.
Meeting the Exemption Criteria:
The court based its decision on the specific services offered by the hostels. As long as the primary function remains providing residential accommodation and basic meals, such hostels qualify for the exemption under Entry Nos. 12 and 14 of Notification No. 12/2017-Central Tax (Rate) dated June 28, 2017.
Thai Mookambikaa Ladies Hostel v. Union of India (Madras HC)
Citation-2024 TAXONATION 600 (MADRAS)
