In re K L N Sourashtra College of Engineering Council (GST AAR Tamilnadu)
In In re K.L.N. Sourashtra College of Engineering Council (2025), the Tamil Nadu AAR held that hostel accommodation and food services provided by one charitable educational institution to another are taxable under GST. Exemption under Notification No. 12/2017-CT(R) applies only if specific conditions under Sl. No. 12A are met.
The Tamil Nadu Authority for Advance Ruling (AAR) examined whether hostel accommodation and food services provided by one charitable educational institution to another are exempt from Goods and Services Tax (GST). The applicant, K.L.N. Sourashtra College of Engineering Council, a registered educational trust, runs a college offering higher education, hostel, mess, and transport facilities to its students. Due to lack of accommodation in another college, the applicant entered into an agreement to host girl students of that institution in its hostel premises.
The main issues raised were whether hostel and food services provided by one charitable college to another are exempt, and how GST applies to hostels run by charitable trusts for students of varying financial backgrounds.
Applicant’s Submissions
The applicant contended that:
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The agreement was between two educational institutions, not with individual students. Hence, invoices would be raised only on the other college.
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Hostel and mess facilities are integral to education and should be treated as exempt educational services.
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Circular No. 228/22/2024-GST (dated 15 July 2024) clarifies exemptions for hostels and lodges but does not address charitable trusts. The applicant sought confirmation that such exemptions also apply to charitable educational institutions.
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Relying on judicial precedents such as Thai Mookambikaa Ladies Hostel v. Union of India (Madras High Court, 2024) and Maharashtra Jain Education Society (AAR Maharashtra, 2024), the applicant argued that hostel services for students should be exempt.
Proceedings and Personal Hearing
During the hearing, the applicant’s representatives reiterated that:
