GST taxability on hostel services provided to foreign university students

I would support the University's exemption position.

For 1 July 2017-14 July 2024: the qualifying hostel accommodation is covered by the specific "as is where is" regularisation in paragraph 9.4 of Circular No. 228/22/2024-GST.

From 15 July 2024: the qualifying hostel accommodation falls squarely within Entry 12A, subject to the Rs. 20,000/person/month and 90-continuous-day conditions.

The fact that the occupants are students of a foreign university, rather than students of the Indian University, should not by itself affect the exemption, because Entry 12A does not impose such a recipient-status condition.

The principal residual risk would therefore not be the foreign-university status of the students. It would be factual: whether the supply is genuinely an accommodation service, whether the Rs. 20,000 threshold is correctly determined, and whether the 90-day continuous-period requirement is demonstrably satisfied.

The official CBIC Circular is particularly clear on both the prospective exemption and the retrospective regularisation.

Risk assessment: Strong / reasonably defensible, subject to the above documentation and assuming there are no bundled services or unusual contractual arrangements.

In spite of the fact that the notification does not bring out the aspect that the exemption is applicable from 1st Jul '17, since it is the recommendation of the Council and also clarified by a circular, the exemption will apply for the past as well.

Important aspect to note is that the exemptions under GST, if given, are to be as per the recommendation of the council.