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The proposed GST Council recommendation to exempt accommodation services having value up to Rs. 20000 per person per month for a minimum stay of 90 days seems to be a knee jerk reaction to the recent Madras High court judgement on the subject.
Residential accommodation is already exempt under GST law, now another classification of accommodation services tagged to a threshold limit seems unnecessary and only causes confusion as to what is Residential Accommodation and what is Accommodation services.
The proposed amendment seems to be against the spirit and the industry's ask. It is requested from the GST Council to revisit its recommendation and merely issue a clarification that PGs and Hostels which do not charge rent by per room-night (like a Hotel) and intended for long term stay are exempted from GST (as they offer Residential Accommodation only).
