The High Court emphasized that these hostels fall under the category of “exclusively residential purpose,” as per a 2017 notification of the central government.
In a recent ruling by the Madras High Court, hostels renting rooms exclusively to girl students and working women have been granted exemption from GST. This decision comes as a relief to administrators of women’s hostels who had challenged an earlier ruling by the Tamil Nadu State Appellate Authority for Advance Ruling.
The High Court, through Justice Krishnan Ramasamy, emphasized that these hostels fall under the category of “exclusively residential purpose,” as per a 2017 notification of the central government. The court’s ruling, passed on Friday, addressed a batch of petitions filed by hostel administrators seeking clarity on the GST applicability to hostel services.
“It is clear that renting out hostel rooms to girl students and working women by the petitioners is exclusively for residential purposes,” noted the High Court judge. He further added that the conditions required for claiming exemption as a “residential dwelling for use as residence” have been met by the petitioners.
The judge highlighted that hostel services are covered under Entry 12 and 14 of the Notification – Central Tax (Rate), dated June 28, 2017. Therefore, the petitioners are entitled to exemption from GST.
Justice Ramasamy emphasized that the focus of imposing GST on hostels should be on whether the rooms are used for “residential dwelling” or “commercial purpose” by the inmates. The levy of GST on residential accommodation, he pointed out, should be viewed from the recipient’s perspective, not the service providers.
This ruling brings clarity and relief to administrators of hostels catering to girl students and working women, ensuring they are exempt from the burden of GST.
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Attention: Deadline to opt for GST Composition Scheme for FY 2024-25 is 31 March 2024