Q. GST On Paynig Guest services

Question

Dear Sir,

What is treatment of PG and Hostel service under GST whether it come under residential which is exempt or commercial which is taxable . In our case property is residential in municipal and used only for residential accomodation. No commercial actvities are done from the premises. Pl guide

Answer 1

Residential Nature: If the PG or hostel service is purely for residential accommodation without any additional commercial activities (such as providing meals as part of a restaurant service, event management, etc.), it is more likely to be considered a service for residential purposes. The fact that the property is classified as residential in municipal records and is used only for residential accommodation supports this view.

Exemption Threshold: The exemption threshold mentioned in the notification (accommodation services below Rs. 1000 per day) would also be a determining factor. If the charges for the PG or hostel are below this threshold, the service could be exempt from GST.

No Explicit Exemption for PG/Hostels: It's important to note that there is no explicit mention of PG or hostel services in the GST exemption notifications. Therefore, the exemption would depend on the nature of the service being purely residential and the charges involved.

Regards, CA. Praveen Sharma

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