GST ON PRIVATELY OWNED HOSTELS ?

[ROHIT GOEL]

My query is with regard to Exemption from Renting of Immovabel Property.

Facts for this discussion are as under:

Charges collected for residential and lodging of the college students staying in hostel owned by private commercial entity will be liable to GST.(Total 500 rooms, rent 5000 per room)

Also 200 flats provided to Staff, rent around 15000 per flat.

Further students are just residing and availing mess facility in the hostel premises.

Mess facility charges and Rent is collected separately? Mess facility charges collected by other person,

BUT EDUCATION IS OBTAINED FROM COLLEGES not connected in any way with the hostel activity.

Whether it will fall under commercial places meant for residential dwelling or lodging purpose? Your early comments on the aforesaid discussion will b highly appreciated.

Sir, Can it be said as renting of residential dwelling for use as residence by students?

Whether GST is applicable on it or not?

Thank you in anticipation.

[KASTURI SETHI]

(i) No, it cannot be renting of residential dwelling for use as residence. As per GST and Service Tax law it is to be treated as commercial.

(ii) As you said, no attachment with educational institution even students and teachers are residing there, so your 'hostel' is equal to 'Hotel', P.G. etc. Legal meaning of 'Hostel', Hostel is collegiate hall for students with provision for boarding and lodging. But as per GST/Service Tax, your activity is commercial inasmuch as benefits/concessions for hostel as part of educational institution are available.

(iii) Mess facility being provided separately is to be treated as outdoor caterer and would attract GST@18%. Concessions are available for educational institutions.

(iv) However, various exemptions below ₹ 1000/-, Ra.10000/- as hotel room, community hall respectively are available.

AI Summary

GST on commercial hostels treated as lodging services, with room charges taxable and mess services classified as catering. Privately owned hostels not connected to an educational institution are treated as commercial lodging services rather than renting of residential dwellings; room charges are taxable under GST. Separately charged mess or food services provided by another person are characterised as catering supplies and attract GST. Institutional concessions require a demonstrable attachment to an educational institution and are not available solely because students reside at the premises, although limited small-value hospitality exemptions may apply where statutory thresholds are met.