Is Paying Guest Accommodation liable for GST?

In this article let us analyse and learn whether letting out of Rooms to students for residential dwelling is exempt from GST or not.

The Authority for Advance Ruling, Karnataka in its recent ruling in the case of Taghar Vasudeva Ambrish has denied the exemption from goods and services tax on letting out of affordable residential accommodation to students.


Applicant- Taghar Vasudeva Ambrish
Nature of business- Letting out of property on lease
Lessor- The applicant and 4 other individuals (Land owners)
Lessee- M/S D Twelve Spaces Pvt Ltd (Operator)

Facts of The Case


The Applicant Had Sought Advance Ruling for Following Questions


Key Observations of The Authority

The Authority while passing the final ruling observed the following key points.

1. The Landowners executed contract for grant of lease of complex with Operator. The complex consisted of 42 rooms with attached toilets. They are like hotel rooms, which do not qualify as residential dwelling

2. The complex is not used by lessee for residence


Ruling of The Authority



Thus, as per this Advance Ruling the transaction between the applicant and M/S D Twelve Pvt Ltd does not qualify for exemption since the property let out is in the nature of hotel, guest houses or inns and does not qualify for a residential dwelling.
However, the terms Residential dwelling/use of residence is not defined under GST Act or any other Acts there still exist ambiguity on the taxability of this service and is debatable.

Disclaimer:“The information contained herein is only for informational purpose and should not be considered for any particular instance or individual or entity. We have obtained information from publicly available sources, there can be no guarantee that such information is accurate as of the date it is received or it will continue to be accurate in future. No one should act on such information without obtaining professional advice after thorough examination of particular situation.”

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Prepared By

Kavya P K

Articled Assistant

Date: 27/07/2020