GST on hotel accommodation rental: taxable supply applies, and the tenant must pay the tax over and above agreed rent.

Rental receipts from hotel accommodation are treated as a taxable supply of services under GST, and once the earlier exemption for lower tariff accommodation was withdrawn, such receipts became exigible to GST at the prescribed rate. Where the rent was fixed before GST and did not include tax, the GST component cannot be absorbed within the agreed rent; the landlord must collect and deposit GST in compliance with registration requirements, and the tenant department must pay GST in addition to the rent.

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Issues: (i) Whether rental income received from letting hotel accommodation is exigible to GST; (ii) whether the tenant department is liable to pay the agreed rent along with GST to the landlord.

Issue (i): Whether rental income received from letting hotel accommodation is exigible to GST.

Analysis: The GST regime treats rental and lease transactions as supply of services. Hotel accommodation let out for consideration falls within the inclusive scope of supply under the GST enactments. Once the later notifications removed the earlier exemption for lower declared tariff accommodation, the receipts from hotel rooms became taxable at the prescribed rate.

Conclusion: Yes. The rental income from hotel accommodation is exigible to GST.

Issue (ii): Whether the tenant department is liable to pay the agreed rent along with GST to the landlord.

Analysis: The tariff had been fixed before the GST regime and did not account for tax. Since the rental receipts are now taxable, the GST component cannot be absorbed within the old rent. The landlord remains liable to collect and deposit the tax, while the tenant department must pay the tax component in addition to the rent.

Conclusion: Yes. The Department of Home must pay GST in addition to the rent, and the petitioner must collect and deposit the tax in accordance with registration and compliance requirements.

Final Conclusion: The petition was disposed of with a direction that the hotel owner is taxable on the rental receipts and the tenant department must bear the GST component over and above the rent.

Ratio Decidendi: Rental of hotel accommodation is a taxable supply of services under GST, and where the pre-GST rent did not include tax, the taxable component is payable in addition to the agreed rent by the recipient of the service.

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