Activity of providing hostel on rent for amount less than Rs. 1000 per day is exempt from GST: AAR

Case Details: Authority for Advance Rulings, Maharashtra Ghodawat Eduserve LLP, In re - [2021] 132 taxmann.com 46 (AAR - MAHARASHTRA)

Judiciary and Counsel Details

• • Rajiv Magoo and T.R. Ramnani, Member

Facts of the Case

The applicant was engaged in services of commercial training and coaching service for students and it was also providing hostel facility to the students on demand basis and charging them additionally. It filed an application for advance ruling to determine whether activity of providing the hostel on the rent to various students by applicant would be exempt.

AAR Held

The Authority for Advance Ruling observed that it was providing residential facilities which included, well-maintained furnished residence, Light, water, etc., and in consideration, it was charging a nominal lump sum fee of Rs. 34,000/- per year per student, which came to Rs. 95/- (Approximately) per day. The hostel was also available for the students of the nearby schools.

As per the exemption under entry No. 14 of Notification No. 12/2012 – Central Tax (Rate), dated 28-6-2017, it was found that the services provided by hostel, for residential and lodging purposes would be covered by the scope of notification entry where the declared tariff of a unit of an accommodation would be below one thousand rupees per day. Thus, the activity of providing the hostel on the rent to various students by applicant would be exempt where hostel fees charged per student per day shall be less than Rs. 1000.

List of Cases Referred to

• • Collins (AP) v. Uratemp Ventures Ltd. [2012] 24 taxmann.com 134 (ECJ) (para 2.5)
  • Borbheta Estate (P.) Ltd., In re [2019] 106 taxmann.com 386/75 GST 234 (AAR – West Bengal) (para 2.22)
  • Kamal Kishor Agrawal, In re [2020] 115 taxmann.com 150/81 GST 235 (AAR – Chhattisgarh) (para 2.22)
  • Students’ Welfare Association, In re [2019] 103 taxmann.com 449/73 GST 650 (AAR – Mah.) (para 2.22)
  • Government of Kerala v. Mother Superior Adoration Convent [2021] 126 taxmann.com 68 (SC) (para 2.26)
  • Union of India v. Wood Papers Ltd. 1991 taxmann.com 77 (SC) (para 2.26)
  • Star Industries v. Commissioner of Customs (Import) [2015] 63 taxmann.com 131/52 GST 922 (SC) (para 2.26)
  • Commissioner of Customs (Import) v. Dilip Kumar & Co. [2018] 95 taxmann.com 327/69 GST 239 (SC) (para 2.26)