Most students and working tenants don't pay GST on PG rent or hostel fees, as long as the accommodation charge is up to Rs 20,000 per person per month and the stay runs at least 90 continuous days. Short stays and costlier rooms fall outside that exemption, so GST can apply to them. The rule comes from a July 2024 central notification, and it covers hostels, student residences and paying guest accommodation alike. This guide walks you through how to check your own bill, step by step.
GST is only one piece of what you're entitled to as a resident. For the wider picture on deposits, agreements and eviction, read what rights PG and hostel residents actually have in India. This article is general information, not legal or tax advice.
Key Takeaways
- Since 15 July 2024, accommodation of up to Rs 20,000 per person per month is exempt from GST if it's supplied for at least 90 continuous days.
- Hostels, student residences and PGs are excluded from the general residential-dwelling exemption, so this newer exemption is the one that matters to you.
- The limit is per person, not per room, which makes your own share the number to check.
- The period from 1 July 2017 to 14 July 2024 was regularised on an "as is where is" basis where the same conditions were met.
- Rules can change, so check the latest GST notifications before you dispute a bill.
What the GST rule for PGs and hostels says
The current position is set by Notification 04/2024-Central Tax (Rate), dated 12 July 2024. It does two things that matter to tenants.
- It keeps hostels and PGs out of the home-rental exemption. The residential dwelling exemption (Sl. No. 12) excludes accommodation in student residences, hostels, camps, paying guest accommodations and the like.
- It adds a separate exemption for them. New Sl. No. 12A exempts accommodation of up to Rs 20,000 per person per month, supplied for a minimum continuous period of 90 days. It took effect on 15 July 2024.
The change followed the 53rd GST Council meeting on 22 June 2024, as noted in CBIC Circular 228/22/2024-GST. So a PG isn't treated like a rented flat for GST. It gets its own test, and you need to pass both parts of it.
Before you begin: what to keep at hand
You'll need a few papers to check your bill properly. Gather these first:
- Your latest monthly invoice or fee receipt from the PG owner or hostel office.
- Your rent agreement, admission letter or booking confirmation showing when your stay started.
- The number of people sharing your room, if the bill is raised per room.
- A note of anything bundled into the charge, such as meals, laundry or electricity.
Step 1: Work out your per-person monthly charge
Start with the accommodation charge for you alone, per month. The exemption limit is Rs 20,000 per person per month, so the room total isn't the figure that counts if you share.
- If you're billed individually, take your monthly accommodation charge as it appears on the invoice.
- If the room is billed as one amount, divide it by the number of occupants to find your share.
- If you pay quarterly, by semester or yearly, convert the amount to a monthly figure.
If meals or other services are bundled in, the notification text alone may not tell you how the charge is split. Ask the operator for an itemised invoice so you can see what's billed as accommodation.
Step 2: Check that your stay meets the 90-day condition
The exemption applies only when accommodation is supplied for a minimum continuous period of 90 days. A monthly charge under the limit isn't enough on its own.
- Long-term residents: a student staying a full semester or a professional on a long-term PG arrangement will usually meet this condition.
- Short stays: a few weeks during an internship, exam season or a city move may not qualify, so GST can apply even when the rent is low.
Check that your agreement or booking reflects the actual length of your stay. A written start date makes the 90-day condition easy to show if anyone questions it.
Step 3: Read your invoice for GST
Once you know whether your stay qualifies, look at what you've actually been charged. If you meet both conditions and still see GST added to your accommodation charge, that's worth raising.
| Your situation | Covered by the Sl. No. 12A exemption? | What to do |
|---|---|---|
| Up to Rs 20,000 per person per month, 90 or more continuous days | Yes | Query any GST added to the accommodation charge |
| Up to Rs 20,000 per person per month, under 90 days | No | Expect that GST may apply; ask the operator to confirm |
| Above Rs 20,000 per person per month | No | Expect that GST may apply; ask for a proper tax invoice |
This table reflects only the July 2024 notification. Bundled services and later changes can affect the answer, so treat it as a starting point.
Step 4: Raise questions with the operator in writing
Put your question in writing and ask the operator to state the basis for the charge. A message or email creates a record, and most billing mix-ups get sorted at this stage.
- Quote the notification number, 04/2024-Central Tax (Rate), and the Sl. No. 12A exemption.
- State your per-person monthly charge and your stay dates.
- Ask whether the GST relates to the accommodation charge or to a separate service on the bill.
For a college hostel, write to the hostel office or accounts section. Fee structures differ between institutions, so their answer depends on how your college classifies each charge. If you later leave mid-year, the hostel fee refund rules colleges follow are a separate question from GST.
Step 5: Keep records of every payment
Good paperwork protects you whether or not GST is involved. Keep each invoice, your agreement and your payment confirmations together for the whole stay.
If you're a salaried professional, the same documents matter for tax. A proper rent receipt for PG stays supports an HRA claim, and the Income Tax Department notes that the HRA exemption is available only under the old tax regime.
Common mistakes to avoid
Assuming a PG counts as a home rental. It doesn't for GST purposes, because the residential dwelling exemption excludes PGs and hostels. Use the Sl. No. 12A test instead.
Comparing the room total with the limit. The limit is per person. Divide a shared room's charge before you compare.
Ignoring the 90-day condition. A cheap short stay can still attract GST. Check your dates as well as the amount.
Relying on an old rule. GST rates and exemptions change through Council meetings and new notifications. Check the latest GST notifications before you act.
What about GST charged before July 2024?
CBIC Circular 228/22/2024-GST regularised the past period from 1 July 2017 to 14 July 2024 on an "as is where is" basis, where the same conditions were met. In plain terms, the old period was settled as it stood. The circular doesn't set out a refund route for tenants, so any past-period dispute is one for a tax professional.
Bottom line
If you pay up to Rs 20,000 per person per month and stay at least 90 continuous days, your PG or hostel accommodation should be exempt from GST under the July 2024 notification. Work out your own share, check your dates, read the invoice and ask in writing if something looks off. Treat all of this as general guidance on the exemption rather than legal or tax advice, and check the latest GST notifications or speak to a tax professional if your case is unusual.
Billing is one part of living in a PG or hostel; the standard PG house rules explain what else your operator can ask of you, and if a problem in a college hostel goes beyond money, here's how to file a complaint with the anti-ragging helpline.
