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CA Intermediate · Taxation · Exemptions from GST

Sunrise Residency, a hotel in Jaipur, lets out a room to a guest at a declared tariff of Rs 6,500 per day for residential stay. Under the GST exemption notification for accommodation services, what is the GST treatment of this supply?

The supply is taxable. Hotel and lodging accommodation is exempt only if the value of supply per unit per day is Rs 1,000 or less. A tariff of Rs 6,500 exceeds that limit, so GST applies regardless of residential use or the guest's registration.

  1. AExempt, because the room is used for residence
  2. BExempt, because the tariff is below Rs 10,000
  3. CTaxable, because exemption for hotel accommodation applies only where the declared tariff is up to Rs 1,000 per dayCorrect
  4. DTaxable only if the guest is a registered person

Explanation

Services by a hotel, inn, guest house, club or campsite by way of providing residential or lodging accommodation are exempt only where the value of supply per unit per day is Rs 1,000 or less. At Rs 6,500 the exemption does not apply, so the supply is taxable irrespective of the guest's registration status. The options citing residential use or a Rs 10,000 limit misstate the condition.

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