Q. GST On Paying Guest hostel service

Question

Dear Sir,

As you have mentioned the exemption notification on accomodation services below 1000 per day/unit  is withdrawn vide  Notification No. 04/2022-CT (Rate) dt. 13.07.2022 . Pl confirm

 

Answer 1

Yes, the exemption on accommodation services priced below INR 1,000 per day per unit was withdrawn through Notification No. 04/2022-Central Tax (Rate) dated 13th July 2022. Prior to this notification, services by way of accommodation in hotels, inns, guest houses, clubs, campsites, or other commercial places meant for residential or lodging purposes, with a declared tariff of a unit of accommodation below INR 1,000 per day or equivalent, were exempt from GST under Notification No. 12/2017-Central Tax (Rate) dated 28th June 2017.

The withdrawal of this exemption means that such services, if provided at a tariff of less than INR 1,000 per day, are now subject to GST at the applicable rates as per the GST law. This change was part of the government's efforts to widen the tax base and remove certain exemptions that were previously available.

It's important for businesses providing accommodation services to update their billing systems and GST compliance processes in accordance with this change to ensure that GST is correctly charged and remitted on services that are no longer exempt.

Regards, CA. Praveen Sharma

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