GST on Rent of PG and Hostel: There is bad news for you if you live in a hostel or PG. Now more charges will have to be paid for the rent of PG and hostels. While hearing two separate cases, the Authority for Advance Rulings (AAR) has ordered the imposition of 12 per cent GST (GST) on the rent of hostels and PGs. In such a situation, people living in these places must pay more.
AAR Gave This Decision
While hearing the matter, the Bangalore bench of AAR said that no residential flat or house and hostel and PG are the same. In such a situation, paying 12 per cent Goods and Services Tax (GST) to places doing commercial activities like hostels and PGs is mandatory. They should not be exempted from GST.
On the application of Sri Sai Luxury Stays LLP, AAR has said that till July 17, 2022, hotels, campsites, or clubs in Bengaluru were exempt from GST up to a fee of Rs 1,000, but AAR said that hostels or PGs are not eligible for GST exemption.
The bench also said that residential property and PG hostel are different. The same rule cannot be applied to both in such a situation. It has also been said in this decision that if someone uses a residential property as a guest house or lodge, it will not be included in the purview of GST.
The Matter Also Came To Light In Noida
Apart from Bengaluru, on the application of Noida’s VS Institute and Hostel Pvt Ltd, the Lucknow bench has said that GST will be applicable on hostels priced below Rs 1,000. This rule is applicable from July 18, 2022. Significantly, this decision will increase the burden on those students and employed people who live in PG or hostels.
