Whether GST payable on residential accommodation & food by private hostel?

May 14, 2025

In a significant relief for college students and working women residing in private hostels, the Goods and Services Tax (GST) Council has clarified that no GST will be levied on the provision of residential accommodation and food by private hostels that cater specifically to these groups. This move is expected to ease the financial burden on students and working women who depend on hostels for affordable living arrangements during their education or professional commitments.

Critical Highlights

1. No GST on Hostel Charges:

Private hostels offering residential accommodation to college students and working women will not be required to charge GST on the rent or lodging fees. This exemption applies to both short-term and long-term stays, provided the primary intent of the accommodation is residential and not commercial.

2. Exemption on Food Charges:

Additionally, hostels that provide food along with accommodation are also exempt from GST on the food charges. This exemption aims to support the affordability of basic living costs for students and working women living in such hostels.

3. Scope of the Exemption:

The exemption applies to all private hostels that serve primarily educational or professional purposes. This includes hostels for students attending universities, colleges, and other educational institutions, as well as those catering to working women who need temporary accommodation near their workplace.

4. Conditions to Qualify for Exemption:

• The accommodation must be provided primarily to students or working women.

• The exemption only applies when the accommodation is for residential purposes and not for business or commercial uses.

• The food served must be part of the hostel’s regular offerings and not on an a la carte or luxury basis.

5. Impact on Students and Working Women:

This exemption is expected to make hostel accommodations more affordable, particularly in urban areas where rent and living expenses can be a significant burden. By eliminating GST on these services, the overall cost of living in hostels will be reduced, making it more accessible for students and working women who are already facing financial constraints.

6. What This Means for Private Hostels:

Private hostels will now be exempt from charging GST on both accommodation and food services, thus simplifying their compliance requirements. Hostel operators will need to update their billing systems to reflect this change and ensure that students and working women are not overcharged for these services.

Fact of the case: -

The petitioners having obtained licence, are running private ladies’ hostels by providing residential accommodation and food to the college students and working women on monthly basis with reasonable tariffs. The monthly tariff per student or per inmate ranges between Rs.1200/- to 6,500/- per month. The charges/rent/tariff collected by them from the inmates on such accommodation, qualifies for GST exemption and therefore, they are entitled to the exemption from levy of GST tax.

Conclusion:

This GST exemption is a much-needed relief for students and working women who rely on private hostels for affordable housing. With the rising cost of living, every little bit of financial relief counts, and this decision is a step in the right direction toward ensuring that basic accommodation and food remain accessible to those who need it the most.