GST Advance Ruling TN/91/AAR/2023: Hostel Tax Exemption Status
The Authority for Advance Ruling dismissed this case because the applicant withdrew their request, leaving the taxability of hostel services undecided.
- Ruling
- Advance Ruling No. 91/AAR/2023 Dated: 04.09.2023
- Authority
- Authority for Advance Ruling
This page was written by Patron Accounting’s AI from the official release and reviewed before publishing. It explains the document in plain language. It is not the document itself. Where this page and the original differ, the original governs.
The short version
- Stay Ladies Hostel asked if their services were exempt from GST.
- The applicant requested to withdraw their application before a decision.
- The Authority dismissed the case without ruling on the merits.
In short
Stay Ladies Hostel asked the Authority for Advance Ruling (AAR) in Tamil Nadu whether their lodging and food services for students and working women were exempt from Goods and Services Tax (GST).
What has changed
How it worked before
There is an ongoing debate among business owners about whether residential hostel services qualify for tax exemptions under specific government notifications.
What has changed
Nothing changed because the application was withdrawn. The Authority did not provide a decision, meaning the tax status of hostel services remains exactly as it was before this filing.
Who this affects
Owners of residential hostels, paying guest accommodations, and similar lodging businesses.
An example
Imagine a hostel owner in Chennai reads this order and assumes their services are now exempt from GST. If they stop collecting tax based on this assumption, they risk a penalty if their local tax officer disagrees. Because this order contains no legal guidance, the owner remains responsible for their own tax compliance decisions.
What you should do
Do not rely on this order for your tax planning. An advance ruling only binds the specific business that asked the question and its local tax office; it is not a general law for all hostels.
If you do nothing
If you assume this order grants an exemption to your business, you may face tax demands, interest, and penalties during an audit. Tax officers are not bound by withdrawn applications and will enforce the law based on their interpretation of your specific services.
The terms explained
- Advance Ruling
- A formal decision provided by tax authorities to a specific business regarding how tax laws apply to their particular situation.
- Exemption Notification
- An official government order that lists specific goods or services that do not have to pay a particular tax.
- Composite Supply
- A package of two or more goods or services provided together, where one is the main service and the others are naturally bundled with it.
The ruling in detail
Authority for Advance Ruling
M/s. STAY LADIES HOSTEL
Advance Ruling No. 91/AAR/2023 Dated: 04.09.2023 · Tamil Nadu
Questions before the authority
- Whether the hostel and residential accommodation extended by the Applicant hostel would be eligible for exemption under Entry 12 of Exemption Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 and under the identical Notification under the TNGST Act, 2017 and also under Entry 13 of Exemption Notification No.9/2017- Integrated Tax-Rate dated 28.06.2017 as amended?
- Whether the Applicant hostel being eligible for exemption under Sl. No. 12 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 dated 28.06.2017 as amended would at all be required to register under the GST enactments by virtue of the exemption notification as afore mentioned and also under the provisions of Section 23 of the CGST/TNGST Act, 2017?
- Whether any specific tariff entry is applicable to hostels under the Tariff Notification, in the event of requirement of registration?
- Whether, in the event of the hostel accommodation being an exempt activity, whether the incidental activity of supply of in-house food to the inmates of the hostel would also be exempt being in the nature of a composite exempt supply?
- Whether the judgement of the Division Bench of the Hon'ble Karnataka High Court in the case of Taghar Vasudeva Ambrish -vs- Appellate Authority for Advance Ruling, Karnataka reported in Manu/KA/0327/2022 is applicable to the facts of the applicant?
Facts
The applicant operates a ladies' residential hostel in Coimbatore, providing lodging and in-house food services to college students and working women. They sought an advance ruling on the taxability of these services, specifically whether they qualify for exemption under certain notifications and if they are required to register under the GST Act. The applicant initially relied on a Karnataka High Court judgment to support their claim for exemption.
Ruling
The Authority did not address the merits of the questions raised because the applicant requested to withdraw their application. Consequently, the application was dismissed as withdrawn.
Reasoning
The applicant submitted a letter dated Nil, received by the registry on 30.08.2023, expressing their intent to withdraw the application for Advance Ruling. The Authority accepted this request and decided to dismiss the application without examining the merits or the legal provisions cited by the applicant or the jurisdictional authorities. No ruling was provided on the substantive questions of law.
Provisions relied on
- Section 98(4) of the CGST Act, 2017
- Section 98(4) of the TNGST Act, 2017
For the practitioner
This order provides **no legal precedent** or guidance on the taxability of hostel services as the application was withdrawn by the applicant. It serves only as a procedural record of the dismissal. Practitioners should note that this ruling **does not settle** the ongoing debate regarding the applicability of GST exemptions to hostel accommodations.
Source
This is a summary prepared from the published order, which is a scanned document. It is a reading aid and not the authority: where the two differ, the order governs. Verify every provision against the original before relying on it.
Original order: https://www.gstcouncil.gov.in/sites/default/files/AAR/91_stay_ladies_hostel.pdf
Legibility of the scan, as read: high.
Prepared 13-10-2026.
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