GST on Hostel Accommodation Service by Educational Institutions to Students with Allied Services

In India, the education sector has been subjected to various tax reforms in the past few years. Although the GST came into effect from July 2017, it was implemented in phases. The GST law has been amended several times to address the issues faced by different sectors. In this article, we will discuss the applicability of GST on hostel accommodation services provided by educational institutions to their students with allied services. GST Rate on Hostel Accommodation ServiceHostel accommodation services provided by educational institutions to their students are taxable under GST. The GST rate applicable to hostel accommodation services is 18%. The rate of GST on hostel accommodation services is the same across India, except for Jammu and Kashmir, where it is 12%.

Exemptions

The Central Board of Indirect Taxes and Customs (CBIC) has provided certain exemptions to the educational institutions providing hostel accommodation services to their students. These exemptions are as follows:

1. Educational institutions providing hostel accommodation services to their students are exempt from GST if the annual aggregate turnover of the institution does not exceed Rs. 20 lakhs.

2. Hostel accommodation services provided by an educational institution to its students are exempt from GST if the annual fee charged by the institution for the same does not exceed Rs. 1,000 per month per student.

Allied Services

Educational institutions usually provide allied services along with hostel accommodation services to their students. The GST rate applicable to these allied services is usually the same as that applicable to the hostel accommodation service. Some examples of allied services provided by educational institutions are:

1. Mess facility

2. Laundry service

3. Transport facility

4. Internet facility

5. Common room facility

Conclusion

The GST law has brought a significant change in the taxation system in India. Hostel accommodation services provided by educational institutions to their students with allied services are taxable under GST. The GST rate applicable to hostel accommodation services is 18%. However, certain exemptions have been provided to the educational institutions providing hostel accommodation services to their students. It is important to understand the GST law related to hostel accommodation services provided by educational institutions to their students with allied services to avoid any issues related to non-compliance with the GST law.