‘No GST on women hostels as end-use not commercial’

Mar24,2024



CHENNAI: Stating that GST on rent is levied only when the rented building is used for commercial purposes. Madras High Court The demand for GST on hostels for working women and girls has been rejected.
Justice Krishnan Ramaswamy, while rejecting the GST demand notice, said, “Advocating imposition of GST hostel accommodationIt has to be seen whether the people staying in the hostel rooms are using the premises as their residential accommodation or for commercial purpose as GST on renting of residential unit is levied only if it is rented for commercial purpose He ruled that since the property is for residential purposes, it will not attract GST.
“So, to claim exemption from GST, the nature of the end use must be residential and this cannot be dictated by the nature of the property or the nature of business of the service provider but by the purpose for which It has been used,” Justice Krishnan Ramaswamy said.
Therefore, this Court is of the considered view that the issue of imposition of GST remains residential accommodation The judge said, it has to be seen from the perspective of the service recipient and not from the perspective of the service provider who offers the premises on rental basis.
The court passed the order while admitting pleas filed by managements of private hostels for working women and girls challenging an order passed by the TN State Appellate Authority on August 31, 2023, which imposed 18% GST on such hostels . “In the present case, levy of GST on hostel accommodation has to be viewed from the perspective of the service recipient and not the service provider,” the court said.



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