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CA Intermediate · Taxation · Exemptions from GST

Sunrise Residency, a lodging house in Jaipur, charges Rs 6,500 per day for a room rented to a business traveller for a stay of 3 days. The same property also lets a residential flat on a monthly rent of Rs 40,000 to Mr. Mehra, an individual who uses it as his own dwelling. Which statement about the GST position is correct?

The hotel room rent is taxable because short-stay lodging is a commercial accommodation service. The flat let to Mr. Mehra, an individual using it as his own residence, is exempt as renting of a residential dwelling for personal residence. So only the flat rent is exempt.

  1. ABoth the room rent and the flat rent are exempt from GST
  2. BRoom rent is taxable, and the flat rent to Mr. Mehra for personal residence is exemptCorrect
  3. CRoom rent is exempt because the stay is under 7 days, and the flat rent is taxable
  4. DBoth are taxable because the lessor is a commercial establishment

Explanation

Hotel and lodging accommodation with a declared tariff above Rs 7,500 is not the issue here; the room is a commercial hotel service and is taxable as it is a supply of accommodation service. Renting a residential dwelling to an individual for use as his own residence is exempt. Option 0 is wrong because the room is not residential rental. There is no exemption based on a stay of under 7 days.

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