Rent on Hostels and Paying Guest Accommodations to Now Attract 12% GST; Students to be Impacted
Accommodation costs for students are set to increase as a 12 percent GST will now be applied to rent payments for hostel accommodations and by paying guests, as per the recent order issued by Advance Rulings in Karnataka.In two distinct rulings, the Uttar Pradesh and Karnataka Authority of Advance Rulings’ (AAR) have classified these accommodations as ‘non-residential,’ making them liable for 12 percent GST, similar to small hotels and inns.The Bengaluru bench of the AAR has clarified that hostels are not considered residential dwelling units and, as a result, are not exempt from Goods and Services Tax (GST). The AAR’s ruling was in response to an inquiry from Srisai Luxurious Stay LLP. Additionally, the AAR stated that accommodation services offered by hotels, clubs, campsites, etc., wit...