Tax sops on accommodation to give leg up to co-living business, ET RealEstate

June 24, 2024
1 min read
Tax sops on accommodation to give leg up to co-living business, ET RealEstate


<p>Representative Image</p>
Representative Image

NEW DELHI: The GST Council‘s recommendation to exempt GST on accommodation services charging up to ₹20,000 per month will benefit the co-living industry and thousands of students and corporate employees, say industry experts.

Previously, there was 18% GST on the services.

In recent years, the GST on residential dwellings has been a grey area. This new notification clarifies that hostels and accommodations for working professionals are exempt from GST within certain limits.

“Tenants will not be eligible to claim the exemption benefit when either the stay is a short one, of less than 90 days, or the payment per month, per person, exceeds ₹20,000,” said Abhishek A Rastogi, founder of Rastogi Chambers.

Industry players say that the recommendation provides much-needed clarity for operators.

“However, in the long term, these should be classified as residential dwellings, thereby exempting them from GST without any limits. This change would reduce the burden on end customers, allowing them to save money on rentals,” said Bharath Bhaskar, co-founder of Settl, a coliving operator.

Experts said that tax exemption for the co-living and student housing sectors has the potential to act as a catalyst, significantly enhancing affordability and attracting a wider tenant base, including young working professionals and students pursuing higher studies outside their hometowns.

“This could lead to a sustained growth trajectory for the co-living and student housing sectors as it would witness increased end-user demand, fostering a more dynamic and accessible housing market in India’s urban centres,” said Rami Kaushal, managing director, consulting & valuation services, India, Middle East & Africa, CBRE.

This exemption has been created to provide benefits to students and to maintain the balance between the exempted services for rented accommodation in a house and the taxable services of staying in a hotel.

“This will benefit a large number of hostels and co-living companies, especially those in the student housing segment, where monthly charges typically fall below this threshold across the country. Additionally, the eligibility condition requiring that the accommodation service be supplied for a minimum continuous period of 90 days can be easily met in the case of student co-living arrangements and hostels, which usually have longer lease or stay durations,” said Sunny Garg, co-founder of CRIB, a PropTech startup.

  • Published On Jun 24, 2024 at 09:29 AM IST

Join the community of 2M+ industry professionals

Subscribe to our newsletter to get latest insights & analysis.

Download ETRealty App

  • Get Realtime updates
  • Save your favourite articles


Scan to download App
realty barcode



Source link

curationteam

Curation Team will curate content from different sources and present for you. We will not edit any content. Source link is provided for the source from where its received .

Leave a Reply

Your email address will not be published.

Over 450 infrastructural projects hit by cost overrun in May 2024, ET RealEstate
Previous Story

Over 450 infrastructural projects hit by cost overrun in May 2024, ET RealEstate

Enforcement directorate seeks details of ATS Group from Noida authority, ET RealEstate
Next Story

Enforcement directorate seeks details of ATS Group from Noida authority, ET RealEstate

Latest from Blog