Hostel Services

[Guest]

Sir

My father is running a hostel with mess facility. Is this service taxable? or will be covered under exeption.

He also give services regarding Repairing & Electrical Fitting. This service falls much below than the threshold limit but alongwith hostel service it crosses the threshold limit.

What would be the treatment of both the services?

Do we need to pay Service Tax?

[YAGAY andSUN]

This needs to be checked under the provisions of Negative list and Mega Notiification. Since there is no clear cut exemption, such services may attract levy of service tax.

[Guest]

Dear Pradeep Sir

Thanx for ur reply. I want to draw ur attention to the mega notification no-18 which says

Services by way of renting of a hotel, inn, guest house, club, campsite or othercommercial places meant for residential or lodging purposes, having declared tariff of a unit of accommodation below rupees one thousand per day or equivalent;So does not the hostel fall under this exemption?

[YAGAY andSUN]

Do you publish Tariff in this regard or declared that tariff of a unit of accommodation below rupees one thousand per day or equivalent?

[Guest]

Dear Sir

Our tariffs are maximum 5000 per person per month. We provide accomodation for 2-3 persons per room.

Thanx

[YAGAY andSUN]

It mean you don't have published tariff.

Anyhow, you may take the shelter of this exemption. 

[SUNIL & KALPANA SINGH TOMAR]

Dear Pradeep ji,

Please advise duty structure on the Bath Rug / Floor Rug/Mat of hand made cottons under CE Tariff 57050042 duty charging 2% (without Cenvat u/notfn no.1/2011) but  some people saying your item not cover in 2% you give 12% duty immediately.

So pls advise .

Amita

AI Summary

Tax Implications for Hostel Services: Check Negative List, Mega Notification, and Exemption for Low-Tariff Accommodations. Handmade Rug Duty Inquiry. A forum user inquired about the tax implications of running a hostel with a mess facility, along with additional services like repairing and electrical fitting, which collectively exceed the threshold limit for service tax. A respondent suggested checking the provisions of the Negative List and Mega Notification, indicating that such services might be taxable. The inquirer referenced a specific notification suggesting an exemption for accommodations with tariffs below a certain amount, stating their hostel charges 5000 per person per month. Another participant sought advice on duty structure for handmade cotton rugs, questioning the applicable duty rate.