GST Payable On Rent For Hotels Hired By Govt For Security Forces, Liability Of Home Dept To Reimburse: J&K High Court
The Jammu and Kashmir High Court has held that the Department of Home is liable to reimburse GST in addition to the fixed rent to hotel owners whose accommodations have been requisitioned for housing security forces.The petitioner had filed the petition seeking a direction that the tax amount be paid or reimbursed separately by the Home Department over and above the fixed rent. A bench...
The Jammu and Kashmir High Court has held that the Department of Home is liable to reimburse GST in addition to the fixed rent to hotel owners whose accommodations have been requisitioned for housing security forces.
The petitioner had filed the petition seeking a direction that the tax amount be paid or reimbursed separately by the Home Department over and above the fixed rent.
A bench of Justices Sanjay Parihar and Sanjeev Kumar observed that while the rental rates were fixed much earlier, the introduction of GST makes it mandatory for hoteliers to register under the Act and pay tax on the rental income.
The court said that “the petitioner is liable to pay GST on the rental income which he is receiving from the Department of Home… shall be legally bound to seek appropriate registration under the CGST/J&K GST Act and deposit the service tax at the prescribed rate with the GST authorities."
The court acknowledged that the Rent Assessment Committee fixed tariffs prior to the GST regime, and thus, GST was not included in the original tariff structure. However, now that the supply of rooms for government use qualifies as a taxable service under GST, the Home Department must bear the tax liability.
The court said that,“the rental income received by the petitioner and other similarly situated hoteliers is now exigible to GST and, therefore, it is the liability of the Department of Home to reimburse such amount."
Expressing concern over stagnation in tariff revision since 2013, the court noted, “It shall be a right time for the Department of Home to constitute a proper Rent Assessment Committee to revise the rental in respect of the hotel accommodations it has taken on rent for the last several years.”
The court disposed of the petition directing the petitioner to obtain GST registration and deposit applicable taxes, and the Department of Home shall pay GST over and above the pre-fixed rent from August 2025.
It said that the GST component must be paid by the government in addition to rent, enabling hotel owners to comply with the law and required the petitioner shall complete the GST registration before July 31, 2025.
BACKGROUND:
The petitioner, owner of Hotel Boulevard at Srinagar, has rented out the premises to the Police Department of Jammu and Kashmir for accommodating Central Security Forces.
As per the Rent Assessment Committee's 2013 recommendation, the petitioner has been receiving rent at Rs. 300 per room per day, without any subsequent enhancement. Despite representations by similarly situated hoteliers, no revision has been made.
In the present petition, the petitioner contends that while the Government has not revised the rent, the GST authorities have raised a tax demand under the J&K GST Act 2017.
Though the petitioner does not dispute GST liability, he seeks a direction that the tax amount be paid/reimbursed separately by the Government over and above the fixed rent. A further direction is sought for the recovery of GST from the Police Department rather than the petitioner.
APPEARANCE:
Manzoor A. Dar, Advocate with Ms. Muzamil Jabeen, Advocate for Petitioners
Mohsin Qadri, Sr. AAG with Ms. Maha Majeed, Assisting Counsel FOR Respondent.
Case-Title: IQBAL MUBARIK vs UT of J&K, 2025