Service tax on hostel provided to students (Not an Educational Institution)

[Muthuraman Alagappan]

Dear Sir,

I have got an opportunity to run a hostel for students, for which i have to take few houses on rent and accomodate the students (4 to 6 in a house) after furnishing. Rent paid for the house will be around ₹ 27000 per month.

Rent collected will be around ₹ 12,000 per student.

Need to know whether can i avail exemption under notification No.25/2012 dt. 20.06.2016 as the rent collected per student is around ₹ 400 per day which is less than ₹ 1000 as mentioned in the notification.

Also food fees can be charged at ₹ 3000 per student in addition to the above. Food is to be prepared and provided in the institution in which they study.

Need to know whether food component attracts service tax.

Thanks in advance.

AI Summary

Student Hostel Rental May Qualify for Service Tax Exemption; Catering Services Are Taxable Per Notification No. 25/2012 A discussion on a forum addresses whether running a student hostel, not part of an educational institution, qualifies for a service tax exemption under Notification No. 25/2012. The original query involves renting houses to accommodate students and charging rent and food fees. The rent per student is 400 per day, which is below the 1000 threshold for exemption. Responses suggest that renting may qualify for exemption, but catering services are taxable. It is advised that financial records be meticulously maintained to ensure clarity between rental and catering services.