Pune: Students coming to Pune for education often rely heavily on hostels run by charitable organizations. However, these hostels had been struggling financially due to the 18% Goods and Services Tax (GST) imposed on them.
Finally, in the 23rd GST Council meeting, it was decided to exempt hostels with monthly fees up to ₹20,000 from GST. This initiative was spearheaded by the Vidyarthi Sahayyak Samiti (Student Assistance Committee).
Last month, the GST Council announced this decision. Dr. Dilip Satbhai, the coordinator of the Pune GST Study Group and a chartered accountant, commented, "Apart from educational institutions, hostels are also run by charitable organizations primarily to provide affordable accommodation to deserving and needy students.
However, the GST was creating a financial burden. As the Student Assistance Committee, we pursued this matter with the Authority for Advance Rulings (AAR) of the GST Council. Now, with the exemption decided in the 23rd GST Council meeting, hostels run by charitable organizations will benefit nationwide."
The chairman of the Student Assistance Committee had met with then Minister of State for Finance, Bhagwat Karad, to discuss this issue in detail. Karad had assured them of action, which seems to have resulted in this exemption. Initially, when GST was introduced, charitable hostels were required to pay 18% GST.
At that time, the Student Assistance Committee had brought this to the notice of authorities. Subsequently, hostels charging up to ₹1,000 per day were exempted from GST.
However, in 2022, the rules were revised again, exempting only the hostels of colleges or educational institutions, while those run by charitable organizations were still subject to GST. This impacted both the charitable organizations and the needy, meritorious students they served.
