Chartering the troubled waters of accommodation services under GST
The government introduced a well-meaning tax exemption to ease the financial burden on students and professionals seeking accommodation services. But its implementation has thrown up several ambiguities.
Until last year, the hospitality and rental sectors benefitted from a broad tax exemption on renting residential dwellings. However, with effect from 15 July 2024, a separate conditional exemption was carved out for accommodation services, relieving these from the levy of goods and services tax, or GST.
This change—applicable to accommodation services provided for a continuous period of at least 90 days, and if the cost involved is under Rs. 20,000 per person per month—was aimed at easing the financial burden on those seeking affordable accommodation. But implementing it has thrown up a number of practical challenges.
