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The activity of providing accommodation services by the applicant in their hostel for which the applicant is collecting an amount below the threshold limit of Rs. 1000/- per day and no other charges are being collected for providing other allied facilities / services therein viz. canteen food, parking space for vehicles, coaching, library, entertainment etc. merits exemption as stipulated under Notification No. 12/2017-State Tax (Rate).

Authority for Advance Ruling —Taxability on Accommodation Service in Hostels-- The applicant a Charitable Trust, running girl's hostel. The hostel is providing basic facilities which are required to stay and to study which include well-furnished residence, security, nutritious food, etc. and in consideration, hostel is charging a nominal lump-sum fee of Rs. 6000/- per month per boarder. The hostel is being run by a charitable trust which is a non-profit entity, accordingly the income tax department has also given the exemption certificate as the hostel is not working for profit. The applicant sought for an advance ruling as to whether (i) the activity of providing the hostel on rent to various boarder is exempted? If it is exempted in such case, under which exemption notification the same is exempted; (ii) the activity of providing the hostel on rent to various boarder is taxable? If it is taxable, in such case, under which service access code the same is taxable?
Held that:- The Hon’ble Authority for Advance Ruling held that the activity of providing accommodation services in their hostel, for which the applicant is collecting an amount below the threshold limit of Rs. 1000/- per day and no other charges are being collected for providing other allied facilities / services therein, merits exemption as stipulated under Notification No. 12/2017. This amount received for such supply fall under tariff heading 9963 qualifies being treated as nil rate tax exempted supply.—Kamal Kishor Agarwal Ramnath Bhimsen Charitable Trust, In Re… [2019] 10 TAXLOK.COM 133 (AAR-Chhattisgarh)