Case Law Details

Case Name : In re Valli Womens Hostel (GST AAR Tamilnadu)
Appeal Number : Advance Ruling No.90/AAR/2023
Date of Judgement/Order : 04/09/2023
Related Assessment Year :

In re Valli Womens Hostel (GST AAR Tamilnadu)

Whether hostel & residential accommodation extended by them is eligible for exemption under Ent 12 of Noti 12/2017 CTR dt.28.06.2017 and Entry 13 of Noti 09/2017 IGST dt.28.06.2017.


M/s. Valli Womens Hostel, 11, Opp to KCT Tech Park, Meenakshi Nagar, Saravanampatti, Coimbatore (herein after referred to as The Applicant’), is unregistered with GST. The Applicant is running a ladies residential hostel for college students and working people.

2.1. The Applicant has submitted the copy of application in Form GST ARA – 01 and also submitted a copy of challan evidencing payment of application fees of Rs.5,000/- each under sub-rule (1) of Rule 104 of CGST Rules 2017 and SGST Rules 2017.

2.2. The Applicant submitted that they have taken the premises on rent and they further let it out for college female students and working women as hostel accommodation, as since most of the students and working people travel far and wide from their remote villages. The applicant herein also provides food as part of hostel services at nominal rates. But the choice is given to the inmates to opt for lodging or for boarding and lodging. The Applicant has its own in-house kitchen facilities with their own staff; to provide homely, tasty and healthy food for the inmates. The total charges collected for boarding/ boarding and lodging ranges between Rs. 40/- per day to Rs. 250/- per day. Thus, the monthly tariff per student or per inmate ranges between Rs. 1,200/- to Rs. 6,500/- per month per inmate. They provide single room occupation, or double room sharing, or dormitory style of accommodation and rates vary accordingly.

2.3. In their interpretation of law/facts in respect of the questions raised, the Applicant submitted that the occupants or the inmates of the residential hostel are either students or working women are not registered persons under the GST Enactments. Thus, in such an event, the exemption that is available under Entry 12 of Exemption Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 as also under the TNGST Act, 2017 and also under Entry 13 of Exemption Notification No.9/2017- Integrated Tax-Rate dated 28.06.2017 is applicable on all force to the Applicant herein, irrespective of the threshold limit. They heavily relied on the decision of the Hon’ble Karnataka High Court in the case of Taghar Vasudeva Ambrish -vs- Appellate Authority for Advanced Ruling, Karnataka, wherein the Hon’ble High Court has held the identical question of law in favour of “hostels” and has held that the exemption available in Entry 13 of Exemption Notification No.9/2017- Integrated Tax-Rate dated 28.06.2017 is available to a residential hostel/residential dwelling meant for students or working people.

3. The Applicants were offered personal hearing on 26.07.2023, wherein Smt. Aparna Nandakumar, Advocate (Authorised Representative -AR) appeared for the Applicant and reiterated the submissions made in the application. She also made additional submissions during the personal hearing. She also relied on certain judgments in their favour.

4. The Applicant’s jurisdictional State Authority had submitted the motive of the Applicant is to run the ladies hostel against the CONSIDERATION which clearly falls under the ambit of definition of SUPPLY as provided in Section 7 of the TNGST /CGST They also stated that they are rendering services by way of renting of immovable property with a business motive for pecuniary benefit. These services are classified under Heading 9963 (Accommodation, food and beverage services). The services rendered by the applicant clearly falls under Entry No. 7 (ix) of the Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 viz. Accommodation, food and beverage services other than (i), (ii), (iii), (iv), (v), (vi), (vii) and (viii) above and the rate of tax to the services are the settled one as per rate notification. From the above analysis of the issue in the hands, rate of tax of 18% is to be levied for the services rendered by the applicant with effect from 01.07.2017 up to 29.09.2019. They also opined that since the definition of Hotel accommodation was broadly expanded in the Notification No. 20/2019 – Central Tax (Rate) dated 30.09.2019, wherein all the accommodation services including hostel accommodations services were brought in to the tax net @ 12% and hence rate of tax for the hostel accommodation services may be taxable @ 12% with effect from 30.09.2019 onwards. The Joint Commissioner (ST), Intelligence, Coimbatore has informed that no proceeding is pending in respect of the applicant.

5. The Applicant’s jurisdictional Central Authority has submitted their remarks on the questions raised that Entry 12 of Exemption Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 covering Heading 9963 or Heading 9972 deals with “Service by way of renting of residential dwelling for use as residence”. The two conditions of ‘residential dwelling’ and ‘for use of residence’ are to be satisfied. However, hostels even though given for residential or lodging purposes are commercial places registered as “commercial establishments” for the purposes of electricity, water, trade licence etc. Therefore, the applicant’s hostel cannot be termed as “residential dwelling” and has to be treated as a commercial place only. Further to the second condition of the entry in the notification that the place intended for residential dwellings which are rented out for use as residence. Whereas it is rented out for use as a hostel facility or paying guest accommodation facility and thereby not for use as residence. Hence, the place rented out is neither a residential dwelling nor being rented out for use as residence. Therefore, the applicant is not eligible for the benefit of this entry in the notification. Further, it was opined that in the event of requirement of registration, hostel accommodation service provided by the applicant will fall under Sr. No. 7 (i) under the heading 9963 (Accommodation, food and beverage services) i.e. Supply of ‘hotel accommodation’ having value of supply of a unit of accommodation less than or equal to seven thousand five hundred rupees per unit per day or equivalent and will attract 12% GST with effect from 18th July, 2022 as per the Principal Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 as amended by Notification No. 20/2019 – Central Tax (Rate) dated 30.09.2019 and further amended by Notification No. 03/2022 – Central Tax (Rate) dated 13.07.2022. Further, the Central Authority stated that the questions raised in the application are not pending or has not been decided in any proceedings in the case of the applicant as per the Centre’s record.

6. Meanwhile, the Applicant vide their letter dated Nil (received by the registry of the Authority on 30.08.2023) have informed that they intend to withdraw their application for Advance Ruling, as their turnover is less than Rupees Twenty Lakhs per year.


7. We take on record the Applicant’s letter dated Nil (received by the registry of the Authority on 30.08.2023), wherein they have informed that they intend to withdraw their application for Advance Ruling, as their turnover is less than Rupees Twenty Lakhs per year. The Applicant’s request is considered and the application is treated as withdrawn without going into the merits or detailed facts of the case.

In view of the above, we rule as under:


The ARA Application Sl.No.22/2023/ARA dated 18.04.2023 filed by the Applicant seeking Advance Ruling is dismissed as withdrawn as per the request of the Applicant.

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