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TMI BlogGST on hostel / PGX X X X Extracts X X X X X X X X Extracts X X X X ..... GST on hostel / PG X X X X Extracts X X X X X X X X Extracts X X X X ..... g the place for running paying guest accommodation. The tenant in the above circumstances must be filing his income tax return for running hostel or PG as business income. In this situation, whether the tenant is liable to pay GST under RCM tax even though no GST (forward) is payable by the landlord. Reply By Sadanand Bulbule: The Reply: Dear Sir Please refer entry 5AA inserted vide Notificati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on No. 05/2022-Central Tax (Rate) dated July 18, 2022 in the principal Notification No.13/2017- Central Tax (Rate) dated June 28, 2017 which states that registered recipient would be liable to pay GST under RCM for 'service by way of renting of residential dwelling to a registered person'. Reply By Sadanand Bulbule: The Reply: Also I wish to add following: Entry at Sl.No.14 was omitted vide Not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ification No. 4/2022-Central Tax (Rate) dated 13.07.2022. Thus in effect only services by way of renting of residential dwelling for use as residence are exempted from GST. Services by a hotel, inn, guest house, club or camp site by whatever name called, for residential or lodging purposes when value of supply is below One thousand rupees are liable to GST w.e.f. 18.07.2022. Reply By KASTURI SETH ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I: The Reply: Here the term, 'registered person' implies for 'business purposes' . The end use matters. This legal position existed in pre-GST era also. I agree with Sh.Sadanand Bulbule, Sir. Reply By KASTURI SETHI: The Reply: Running PG is a commercial activity. Hence taxable under GST. Reply By KASTURI SETHI: The Reply: Not litigation-free. The possibility of filing civil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal against Madras High Court judgement with the Supreme Court by the department cannot be ruled out. Reply By Ethirajan Parthasarathy: The Reply: Thanks to both of you for valuable inputs..As rightly pointed out by Mr.Kasturi Sethi, the Madras High Court decision cannot be taken as "Final". We are under the senerio that tenant has to pay tax under "RCM" going by Madras ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court decision, the landlord is not liable for GST under forward charge. There are few AAR decisions that GST is leviable under forward charge by the landlord and hence there will be no question of RCM tax levy on the tenant. It is a tough call for consultants to advise the clients in the above situation. Reply By Ethirajan Parthasarathy: The Reply: In addition, If any one takes initiativ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of paying tax, can the other party ( land lord or tenant) defend tax demand on them by the department taking opposite view Reply By Sadanand Bulbule: The Reply: Dear Sir Since the interpretations and decisions of the adjudicating authorities are highly unpredictable and vulnerable, many a times the arguments on merits miserably fail.So the consultants are standing on the edge of the cliff wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hout wings. "Lack of knowledge" and the height of ego are the root causes for the funeral of merits. This trend is making the consultants to think so differently about everything they thought before. "A thing is not high if one can reach it; it is not great if one can reason about it; it is not deep if one can see the bottom". __This was the dream of the aw makers while launch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing GST regime. And rest is all bitter history! Reply By Sadanand Bulbule: The Reply: Plz read it as law makers. Reply By Shilpi Jain: The Reply: The Madras HC decision and the Karnataka HC decision in the case of Taghar Vasudev - 2022 (2) TMI 780 - KARNATAKA HIGH COURT, bring out the main aspect that hostel room is still a residential dwelling. These cases should be looked at bringing out th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is ratio and principle where the department has been arguing that hostel is a commercial business and cannot be regarded as a residential dwelling. Reply By Shilpi Jain: The Reply: This ratio needs to be applied in the context of the provisions appearing at each point of time. So today, the landlord renting a building (hostel set up) to a person who would run the hostel would still be liable to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... GST, but the tenant running the hostel and say renting to students will be exempt Reply By KASTURI SETHI: The Reply: Sh.Sadanand Bulbule Ji, Sir, Your grievance is correct but the original Adjudicating Authority is not the end of the road. In India still honesty, sincerity, integrity, morality, devotion and dedication to duty exist. All is not bad. All is not lost. Also see the other side. Are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all assessees honest ? Are all assessees give due respect to the chair (Proper Officer) ? Are the assessees without ego ? Are they well disciplined when they appear before the Adjudicating Authority or Appellate Authorities ? These aspects are worth examination. So there are so many factors. You are well aware of the percentage of the cases lost by the department. Majority of the cases are decid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in favour of the asessees . In my view only 5% cases out of 1000 are won by the department. At the same time, I do not rule out the possibility of the major factors i.e. 'ego' 'lack of knowledge' 'prejudiced mind' 'biased mind' which are bottlenecks in the way of providing justice. Disclaimer : These are my personal views for the purpose of education of the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aders of TMI and also in the interest of the assessees.
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A hostel and a paying guesthouse are residential dwellings. What makes the difference is that whether it is being used for a commercial purpose or not . The word, 'hostel' does not signify the purpose for a student only. X X X X Extracts X X X X X X X X Extracts X X X X
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