Tvl. Gopi Damodaran (GST AAR Tamil Nadu)
The applicant, a proprietor providing services including property leasing, owned a residential building in Coimbatore and proposed to lease it to a tenant intending to operate a hostel for students and working persons. The stated objective of the prospective tenant was to provide safe and affordable accommodation, possibly with optional boarding facilities. The expected charges ranged between ₹300 and ₹500 per day, translating to ₹10,000 to ₹15,000 per month per inmate. Accommodation formats included single rooms, shared rooms, and dormitory-style lodging.
The applicant sought an advance ruling on multiple GST-related questions connected to the proposed hostel operations of the prospective tenant. These included whether such hostel accommodation could be treated as “residential dwelling” eligible for exemption under specified GST notifications for different time periods, whether the tenant would be required to obtain GST registration if the activity were exempt, whether in-house food supply would also be exempt as part of a composite supply, and whether certain High Court judgments would apply to the facts of the case.
In the statement of facts, the applicant distinguished hostels regulated under the Tamil Nadu Hostels and Homes for Women and Children (Regulation) Act, 2014 from “residential hotels” under another state law. The applicant referred to past indirect tax treatment under service tax and VAT, various exemption notifications under GST, and judicial interpretations of the term “residential dwelling.” The submissions also cited High Court decisions which, according to the applicant, supported the view that hostel accommodation for students or working women could qualify as residential dwelling. Reference was also made to subsequent GST Council recommendations, amendment notifications, and a CBIC circular concerning exemption and regularisation of tax for certain low-value, long-term accommodation services.
Jurisdictional state tax authorities reported that no proceedings were pending against the applicant on the issues raised. No remarks were received from central tax authorities, and it was assumed that no proceedings were pending from their side as well.
A personal hearing was held on 11.11.2025, where the applicant’s authorised representatives reiterated their submissions and provided additional documents including copies of notifications, circulars, case laws, and a rental agreement. They maintained that hostel facilities for girl students and working women should be treated as residence based on judicial precedents.
During the hearing, the Authority pointed out that the primary questions raised did not relate to supplies made or proposed to be made by the applicant, but instead concerned activities of the applicant’s prospective tenant. The Authority indicated that this raised issues regarding the admissibility of the application under the statutory definition of “advance ruling.” It was also noted that questions about the applicability of specific court judgments did not fall within the categories of questions permitted under the advance ruling provisions. The representatives responded by referring to a similar matter admitted by another Authority and stated they would furnish supporting material.
Subsequently, before any ruling on admissibility or merits was issued, the applicant submitted a letter dated 14.11.2025 stating that circumstances had changed. The applicant informed the Authority that the property would now be rented to a tenant who was not engaged in the business of running a hostel or providing residential accommodation services to students and working individuals. In view of this change, the applicant expressed that they were no longer interested in pursuing the advance ruling and requested withdrawal of the application.
The Authority recorded this request and decided to dispose of the application accordingly. As the matter was withdrawn at the applicant’s request, the Authority did not examine the merits of the questions raised or issue any findings on taxability, exemption, or registration requirements.
