The Authority for Advance Rulings (AAR) has ruled that hostels and PGs are not exempt from Goods and Services Tax (GST). From now on, people living in these places will have to pay 12 percent GST on their rent.
The AAR clarified that hostels and residential properties are not the same, and commercial activities like hostels and PGs must pay GST. However, if someone uses a residential property as a guest house or lodge, it won’t be subject to GST.
To explain it in simple terms, if you stay in a Rs. 20,000/month flat, you pay zero GST. But if you are paying Rs. 10,000 in a hostel or PG, you need to pay 12% GST.
People on social media are slamming the government for making the lives of hostel students even more difficult. A 12% tax on student accommodation in hostels and dormitories would lead to a higher cost for Indian families. This decision puts an extra burden on students and employed individuals residing in PGs or hostels.
Students are the future of our country. Instead of giving them 100% free school education and hostel facilities, imposing 12% GST on their hostel fee is cruel and horrendous.
