Hostel accommodation for students exempt from GST under specific criteria.

The Authority for Advance Ruling (AAR) determined that the activity of providing hostel accommodation to students by the applicant is exempt from GST under Serial Number 14 of Notification No. 12/2017-Central Tax (Rate). The AAR found that the hostel accommodation did not qualify as a "residential dwelling" under Serial Number 12 due to its temporary nature and restrictions on use, but rather fell under Serial Number 14 as the services provided were lodging below the specified tariff.

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Issues Involved:
1. Whether the activity of providing hostel accommodation to students is exempt from GST.
2. If exempt, whether the exemption falls under Serial Number 12 or Serial Number 14 of Notification No. 12/2017-Central Tax (Rate).

Issue-Wise Detailed Analysis:

1. Exemption of Hostel Accommodation from GST:
The applicant, M/s. Ghodawat Eduserve LLP, provides hostel facilities to students at a nominal fee of Rs. 34,000 per year, which is approximately Rs. 95 per day. The applicant contends that this service should be exempt under GST Notification No. 12/2017-Central Tax (Rate).

The term "residential dwelling" is not defined in the GST Act. The applicant interprets "residential dwelling" to include hostels, based on common parlance and judicial interpretations, arguing that hostels provide long-term residential accommodation similar to residential dwellings.

The concerned officer argues that hostel facilities, unlike residential dwellings, are temporary and exclusive to students of the educational institution, lacking the permanence and amenities (like kitchens) typical of residential dwellings.

2. Applicability of Serial Number 12 or Serial Number 14 of Notification No. 12/2017-Central Tax (Rate):
The applicant asserts that the hostel services should be exempt under Serial Number 12, which exempts "Services by way of renting of residential dwelling for use as residence." They argue that hostels fit within the definition of residential dwellings and thus should qualify for this exemption.

The concerned officer, however, contends that hostels do not meet the criteria for residential dwellings as they are meant for temporary student accommodation and do not provide the same rights and amenities as residential dwellings.

The Authority for Advance Ruling (AAR) examined both Serial Number 12 and Serial Number 14 of the notification. Serial Number 14 exempts "Services by a hotel, inn, guest house, club or campsite, by whatever name called, for residential or lodging purposes, having declared tariff of a unit of accommodation below one thousand rupees per day."

The AAR concluded that the hostel accommodation provided by the applicant does not qualify as a "residential dwelling" under Serial Number 12 due to its temporary nature and restrictions on use. Instead, it falls under Serial Number 14, as the hostel provides lodging services at a rate below Rs. 1000 per day.

Conclusion:
The AAR ruled that the activity of providing hostel accommodation to students by the applicant is exempt from GST under Serial Number 14 of Notification No. 12/2017-Central Tax (Rate), as it meets the criteria of providing lodging services below Rs. 1000 per day. The exemption under Serial Number 12 is not applicable in this case.

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