GST on Rent of PG and Hostel: If you live in hostel or PG then there is bad news for you. Now more charges will have to be paid for the rent of PG and hostels. The Authority for Advance Rulings (AAR), while hearing two separate cases, has ordered the imposition of 12 per cent GST (GST) on the rent of hostels and PGs. In such a situation, people living in these places will now have to pay more.

AAR gave this decision

The Bangalore bench of AAR, while hearing the matter, said that no residential flat or house and hostel and PG are the same. In such a situation, it is mandatory to pay 12 percent Goods and Services Tax (GST) to places doing commercial activities like hostels and PGs. They should not be exempted from GST. On the application of Srisai Luxury Stays LLP, AAR has said that till July 17, 2022, hotels, campsites or clubs in Bengaluru were exempt from GST up to a fee of Rs 1,000, but AAR said that hostels or PGs are not eligible for GST exemption .

Along with this, the bench said that residential property and PG hostel are not the same. In such a situation, the same rule cannot be applied to both. Along with this, it has also been said in this decision that if someone uses a residential property as a guest house or lodge, then it will not be included in the purview of GST.

The matter also came to light in Noida

Apart from Bengaluru, on the application of Noida’s VS Institute and Hostel Pvt Ltd, the Lucknow bench has said that GST will be applicable on hostels priced below Rs 1,000. This rule is applicable from 18 July 2022. Significantly, this decision will increase the burden on those students and employed people who live in PG or hostels.