GST Applicable on Hostel and Food Services in Charitable Colleges: Tamil Nadu AAR Clarifies
The current application (Form GST ARA-01), dated 08.02.2025, has been filed by M/s. KLN Sourashtra College of Engineering Council (applicant) before the Authority for Advance Ruling, Tamil Nadu No. 207, 2nd Floor, Papjm Building, No. 1, Greams Road, Chennai 600 006. The authority announced its ruling under Section 98(4) of the CGST Act, 2017 and under Section 98(4) of the TNGST Act, 2017. The benches announcing the decision comprised Shri C.Thiyagarajan, I.R.S., Additional Commissioner/Member (CGST) and Shri B.Suseel Kumar, B.E., MBA, Joint Commissioner/Member (SGST).
The applicant possesses a registered address at 6, South Veli Street, Madurai, Tamil Nadu-625 001, and is registered under the GST Act, with GSTIN no. 33ААААK1295N1ZH.
The applicant is a registered educational trust involved in offering higher education to students, in addition to educational services like transportation, mess services and hostel services to students. The applicant has signed an agreement to provide hostel accommodation for girl students from another college, which does not have its own hostel. The applicant explained that this agreement is directly between the two educational institutions and not between the hostel provider and the students. Hence, the applicant will issue the bill to the other college, not to the students themselves.
Questions Asked by Applicant:
Seeking the present Authority For Advance Ruling (AAR), Tamil Nadu (No. 40/ARA/2025), dated 25.09.2025, the applicant has asked the following questions:
“Question 1. What is the present position for the levy of GST on hostels for poor and middle-class students run by charitable Trusts?
Question 2. What is the present position for the levy of GST on hostels for high-class students run by charitable Trusts?
Question 3. What is the yardstick to classify the students as Poor, Middle and High class?
Question 4. What is the position for the levy of GST if one college accommodates the students of another College? Please note that both Colleges are Charitable Institutions. Is it a taxable or exempt Service? The agreement for Hostel accommodation has been entered into between the two Colleges, and one College makes the payment to the other College. There is no agreement between the Service Provider and the accommodated Students, and no separate bills/receipts will be issued to them. Bill will be raised only in the name of the College whose students are accommodated. If it is exempt, whether the same is exempt with effect from 15.07.2024 as per Notification No. 4/2024-CT(R) dated 12.07.2024.
Question 5. Similarly, what is the position for the levy of GST for the food supplied to Hostel students of another College residing in this College? Please note that both colleges are Charitable Institutions. Is it a taxable or exempt service? The agreement of Food Supply has been entered into between the two Colleges, and one College makes the payment to the other College. There is no agreement between the Service Provider and the accommodated Students, and no separate bills/receipts will be issued to them. Bill will be raised only in the name of the College whose students are accommodated. If it is exempt, whether the same is exempt with effect from 15.07.2024 as per Notification No. 4/2024-CT (R) dated 12.07.2024.
Question 6. What is the applicable rate/rates of GST if the Council decides it is taxable for both the Hostel accommodation and food supplies to the students?”
Answers Given by AAR Tamil Nadu:
The authority for advance ruling (AAR) has given the following answers to the questions asked by the applicant:
Answer 1. In answer to the first question, the authority said that the hostels for poor and middle-class students run by charitable Trusts are allowed to claim exemption under Sl No. 12A of the Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, as amended. But the hostel must fulfil the conditions mentioned in the notification.
Answer 2. In answer to the second question, the authority said that the hostels for high-class students run by charitable Trusts are allowed to claim exemption under Sl No. 12A of the Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, as amended. But the hostel must fulfil the conditions mentioned in the notification.
Answer 3. In answer to the third question, the authority said that this question does not fall under the scope of Section 97(2) of the CGST Act, 2017, and hence, the authority did not answer the question.
Answer 4. Renting out the properties by the applicant to a college or university is considered a taxable service and hence will attract the relevant rate of GST.
Answer 5. The supply of food by the applicant to students at some other institution is a taxable service and hence will attract the relevant rate of GST.
Answer 6. In answer to the sixth question, the authority said that this question does not fall under the scope of Section 97(2) of the CGST Act, 2017, and hence, the authority did not answer the question.
Refer to the official advance ruling for complete information.
Citation: M/s. KLN Sourashtra College of Engineering Council (AAR Tamil Nadu); Advance Ruling No.40/ARA/2025; 25/09/2025
