GST applicability on Hostel Running Services

[Rajat Singhania]

Dear Members,

For a private institution which outsources its entire hostel facility to some third party for running and the said third party issues a monthly bill to the institution, GST would be levied @5% only on the fooding component or would the entire bill be subject to GST. If so, what rate of GST would be applicable.

The question arises because hostel services mainly consist of fooding and lodging services. For fooding services ,there was a circular issued in January 2018 which stated the rate of GST as 5% without ITC. But for the lodging part in case of hostels, there is no such notification/circular,as per my understanding.

Please put forward your valuable views for discussion.

[CASusheel Gupta]

Dear Rajat

Services provided to an educational institution, by way of security or cleaning or housekeeping services performed in such educational institution are exempt as per notification 13/2017.

Thanks and Regards

CA Susheel Gupta

8510081001, 9811004443

[Alkesh Jani]

Sir,

My point of view is that, the exemption is available if services are supplies to educational institute, upto Secondary level, if above, the secondary level GST is applicable.

Further, in the instant case, no separate services are supplies but supplied in mixed. Therefore, Higher rate is applicable.

Our experts may correct me if mistaken.

Thanks

[KASTURI SETHI]

Lodging means accommodation. Hostel room rent is less than RS.1000/- per day. Hence exempted.

[Himansu Sekhar]

Circular No. 32/06/2018-GST Dated 12.02.18 may be referred

[DR.MARIAPPAN GOVINDARAJAN]

I endorse the views of Shri Himanshu

AI Summary

GST on hostel services: componentisation and exemptions determine whether food, lodging, or the whole invoice is taxable.
GST treatment of outsourced hostel services turns on componentisation and applicable exemptions: food in hostels may attract a concessional tax rate with restricted input tax credit, services rendered to educational institutions such as security and housekeeping are noted as exempt, lodging may be exempt if room charges fall below the prescribed threshold, and a mixed supply that cannot be separated may attract the higher applicable rate.