No GST on hostel fees if less than Rs 1k per day

MUMBAI: The Maharashtra bench of the Authority for Advance Rulings (AAR) has held that hostel fees charged to students will not attract goods and services tax (GST) where the rent per room is less than Rs 1,000 per day, per person. This will be subject to a ‘nil’ rate under Entry Number 14.
Further, the Central Board of Indirect Taxes and Customs (CBIC) has also clarified in its circular dated February 12, 2018 that, if the lodging fees are below this prescribed monetary limit, it will be exempt from GST.

Ghodawat Eduserve, a Kolhapur-based entity, was providing commercial training and coaching services to students of standards 11 and 12. The hostel facilities provided were optional and were not part of the coaching fees. The hostel provided for basic residential facilities on a room-sharing basis, for a yearly sum of Rs 34,000, or approximately Rs 94 per day.
The AAR had to dive deep into the meaning of ‘residential dwelling’, as this was not specifically covered under GST laws. However, the wider definition under Entry Number 14 helped the applicant entity.


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