Home Business: Students will have to pay more for rent as hostels and PGs will now attract a 12% Goods and Services Tax (GST) according to a ruling by the Authority of Advance Ruling (AAR). The AAR has stated that hostel accommodation does not qualify for GST exemption as it is not considered a residential dwelling unit. This means that students and individuals staying in hostels will now have to pay an additional 12% tax on their rent. This ruling comes after the government lifted the GST exemption for hotels and guest houses with rent up to Rs 1,000 per day. As a result, hostel rent has been subject to GST since July 17, 2022. The AAR’s decision is likely to increase the cost of living for students in hostels and could also impact the hostel industry by decreasing occupancy rates and profits.
Hostels & PGs Increasing Rent to Incorporate Additional 12% GST Charges for Students
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