Hostel Service - without Education - Liable to Service Tax?

[RAJJ gadhiya]

Dear Sir,

With regard to New Service Taxation System-Negative List Based taxation w.e.f 1.7.2012 under Finance Act 2012, 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 students (esp college students ) staying in hostel owned by private commercial entity will be liable to service tax under Negative list based taxation?

Further students are just residing and availing mess facility in the hostel premises BUT EDUCATION IS OBTAINED FROM COLLEGES not connected in any way with the hostel activity?

In other words, colleges are just providing education and independent hostel services are provided by private commercial entity. It is to be noted that Hostel was categorically exempted from Service tax levy by excluding in the definition of txable service in earlier LAW.

But after introdcution of Negative list whether it will still be exempted from service tax levy ? If yes, under which specific terminlogy of Point No 18 of Mega Exemption notification  no. 25/2012?

Whether it will fall under commercial places meant for residential dwelling or lodging purpose? Your early comments on the aforesaid discussion wil b highly appreciated.You may reply detailed discussion on [email protected]

Thank you in anticipation.

AI Summary

Hostel accommodation service tax treatment hinges on whether mess is bundled or charged separately, affecting exemption status.
Whether hostel charges with ancillary mess facilities are taxable under the negative-list regime turns on classification and aggregation: if accommodation and mess are naturally bundled and the combined charge remains below the specified daily room-rent threshold, the bundle may qualify as exempt renting of residential dwelling under Notification No. 25/2012; if mess charges are separately identified, catering may constitute a distinct taxable service subject to valuation rules and the small-service-provider turnover ceiling for relief.