No GST on Providing Residential Accommodation & Food by Private Hostel to College Students or Working Women | Madras HC

Case Details: Thai Mookambikaa Ladies Hostel v. Union of India - [2024] 160 taxmann.com 667 (Madras)

Judiciary and Counsel Details

• Krishnan Ramasamy, J.
• Ms Aparna Nandakumar for the Petitioner. 
• A.P. Srinivas, Sr. Standing Counsel for Customs & GST, Rajanish Pathiyil, Sr. Panel Counsel, Sai Srujan Tayi, Sr. Panel Counsel, B. Ramanakumar, Haja Nazirudeen, Addl. Advocate General-I, V. Prasanth Kiran, G.A. (Tax) for the Respondent.

Facts of the Case

The petitioner was running private ladies hostels by providing hostel accommodation services. It filed an application for advance ruling to determine taxability of hostel accommodation services. The Authority for Advance Ruling (AAR) held that services by way of providing hostel accommodation supplied by the petitioner would be taxable at the rate of 18%.

It filed appeal against the ruling and contended that the services provided by leasing out residential premises as hostel to students and working professionals would be exempted from GST but the Appellate Authority for Advance Ruling (AAAR) also upheld the order of AAR. It filed writ petition against the order of AAAR.

High Court Held

The Honorable High Court noted that the hostel would be used by the students for the purposes of residence and the imposition of GST on hostel accommodation should be viewed from the perspective of the recipient of service. Since renting out hostel rooms to girl students and working women by petitioners is exclusively for residential purpose, condition prescribed in Notification in order to claim exemption, viz., ‘residential dwelling for use as residence’ has been fulfilled by petitioners and, thus, said services are covered under Entry Nos.12 and 14 of Notification No. 12/2017-Central Tax (Rate) dated June 28, 2017.

Therefore, it was held that the services provided by the petitioner by leasing out residential premises as hostel to students and working professionals would be covered under Entry 13 of Notification No.9/2017 dated 28.09.2017 and exempted from GST.

List of Cases Reviewed

• Filter co and others v. Commissioner of Sales Tax (para 16);
• Sakthi Masala (P) Ltd. v. The Special Commissioner of Commercial Taxes (para 19);
• Tvl.Pizzera Fast Foods Restaurant Madras Pvt. Ltd. v. Commissioner of Sales Tax (para 19);
• Taghar Vasudeva Ambrish v. Appellate Authority for Advance Ruling (para 58);
• Collector of Central Excise v. Parle Exports (P) Ltd.,. [1989] 1 SCC 345 (para 64)
• Government of Kerala & Anr. v. Mother Superior Adoration Convent” (Civil Appeal No. 202 of 2012 and others”, decided on March 1, 2021 (para 64) – followed
• Assistant Commissioner of State Tax and Others v. Commercial Steel Ltd., 2021 SCC OnLine SC 884 (para 65)
• Anmol Industries Ltd. v. West Bengal Authority for Advance Ruling, Goods and Services Tax, (2023) 153 taxmann.com 549 (Calcutta) (para 65)
• Jotun India Pvt. Ltd. v. Union of India and others (2023) 109 GSTR 191 (Bom.) (para 65)
• Columbia Sportswear Company v. Director of Income Tax, Bangalore (2012) 11 SCC 224; (para 65) – distinguished