Service Apartment Rates

[Kannan A]

GST rate for room rate ₹ 1000 to 2500 is 12%. In the service apartments like 2 bhk apartment we provide at rate ₹ 1500 per day which ₹ 750 per room . Does GST would be applicable for it ?

Some time we also provide 2 bhk for ₹ 2000 per day which is ₹ 1000 per room which is under GST.

Please clarify.

[Himansu Sekhar]

Please specify whether it is renting for residential purpose or otherwise. The former does not attract gst.

[Himansu Sekhar]

If commercial it attracts gst.

[Rohit Sharma]

Please clarify the definition and difference of Residential purpose service apartment and Commercial purpose service apartment?

[Kannan A]

1.Yes it is commercial and SSI registered Service Apartment. I have also enrolled and migrated from Service tax to GST.

2. Question is whether slabs given in GST is for one room . Room tariff of ₹ 1000 to 2500 is 12%. But we run as fully furnished service apartment with 2 bedroom apartment with living room and kitchen for self cooking. So here we have to consider 2 bedroom as 2 rooms . Is that correct ?

3. Normally we give the 2 BHK apartment at tariff of ₹ 1500. So it is ₹ 750 per room. How to confirm that this will not go for GST.

[Rajagopalan Ranganathan]

Sir,

Do you rent the two rooms to different individual? in such a case there will be no GST since the rent collected from two different individuals is less than ₹ 1000/-. However if you rent it out to a family then you have to pay gst since the rent charged is ₹ 1000/-. This is true in the case of rent is on daily basis. If the rent is charged on monthly basis for a family then gst is exempted since the service provided is renting residential premises which is not chargeable to gst.

[Kannan A]

Thank you Sir for the response.

1. 2 BHK apartment is rented to one family only . Most of the times family stay for one month to 6 months depends on their need. I don't put rental agreement . Just collect the monthly rent. Kindly confirm this is exempted from GST.

2. Since i have registered the apartments for GST and provide one of the apartment on monthly basis . Does GST for the monthly basis apartment is exempted ?

3. Guest raise concern why GST to be paid for monthly rent ?

[Rajagopalan Ranganathan]

Sir,

Services by way of renting of residential dwelling for use as residence classifiable under headings 9963 or 9972 is chargeable to GST at 'Nil' rate vide sl. No. 12 of Notification 12/2017-Central Tax dated 28.6.2017. There is no condition that the rent should not be charged on daily basis but charged on monthly basis.

[KASTURI SETHI]

Dear Querist, Yours is a hotel. Hotel is always commercial. You fall under Serial no.14 of Notification no.12/17-Central Tax (Rates) dated 28.6.17. Read this notification carefully.

[KASTURI SETHI]

Your activity should be read in the light of , "in the course or furtherance of business.

AI Summary

Renting residential dwelling: nil GST if a unit is let to a family for residence; hotel classification attracts GST. If a two bedroom unit is let to a single family for use as residence it is treated as renting of a residential dwelling and is nil rated; classification as a hotel or commercial accommodation converts the activity to a taxable supply attracting applicable room rates. The exemption is stated to be unaffected by whether rent is charged daily or monthly, and the character of the letting (family occupancy vs separate lets, hotel operation) determines whether room tariff slabs or residential exemption apply.