No GST on renting of hostel rooms for residential purpose: Madras HC

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No GST on renting of hostel rooms for residential purpose: Madras HC

 

In a significant ruling, the Madras High Court has held that hostels being used for residential purposes will not attract goods and services tax. The Order by Madras High Court judge Krishnan Ramasamy has quashed a decision by the Tamil Nadu State Appellate Authority for Advance Ruling,which said that this would be subject to 18% GST.

Justice Krishnan Ramaswamy, setting aside the GST demand notice, said: “While adverting to the imposition of GST on hostel accommodation, it has to be looked into as to whether the inmates of the hostel rooms are using the premises as their residential dwelling or commercial purpose since renting of residential unit attracts GST only when it is rented for commercial purpose.” Since the end-use of the property is for residential purposes, it would not attract GST, he ruled.

Therefore, this court is of the considered view that  the issue of levy of GST on residential  accommodation should be viewed from the perspective  of the recipient of service and not from the  perspective of service provider, who offers the premises on rental basis, the judge said.

 

The copy of the order is as under:

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From,

Krishnakant Jakhotia

Mobile No :- 9422507911

Email Id :- taxtalknew@gmail.com

 

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