Lodging exemption for hostel accommodation applies where bundled ancillary services are incidental and tariff stays below the threshold.

Hostel accommodation supplied with incidental ancillary facilities for a single lump-sum charge was treated as a naturally bundled composite supply, with boarding as the principal element. Because the per-unit charge, when converted to a daily basis, remained below the prescribed tariff threshold, the supply fell within the specific exemption entry for lodging services by hotels, inns, guest houses, clubs or campsites by whatever name called. The ruling also noted that trust status alone does not make hostel accommodation a charitable exemption; exemption depends on satisfying the lodging entry conditions. The service was therefore treated as exempt and taxable at nil rate.

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Issues: Whether hostel accommodation provided by the applicant, together with ancillary facilities supplied for a single lump-sum charge below the prescribed daily threshold, is exempt from GST under the relevant exemption notification.

Analysis: The accommodation and allied facilities were examined as a bundled supply in which the boarding facility was the predominant element and the other facilities were incidental to the stay of the occupants. The charge collected per unit, when converted to a daily basis, remained below the threshold prescribed in the exemption entry for services by a hotel, inn, guest house, club or campsite by whatever name called for residential or lodging purposes. The ruling also applied the departmental clarification that hostel accommodation by trusts is not exempt as a charitable activity merely by reason of the trust status, but can still qualify for exemption under the specific lodging entry when the tariff condition is satisfied.

Conclusion: The hostel accommodation service, with no separate charge for allied facilities and with declared tariff below the prescribed limit, is exempt under the relevant serial of the exemption notification and is taxable at nil rate.

Ratio Decidendi: Where accommodation is the principal supply in a naturally bundled composite supply for a single price, and the declared tariff falls below the prescribed exemption threshold, the entire supply is covered by the specific lodging exemption and is not liable to GST.

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