Hotels whose rooms are hired by the Home Department must register and pay GST on rent; Department to pay GST over and above rent: J&K and Ladakh High Court

The Court disposed of the petition on the terms of its earlier ruling in Haji Khazir Mohd. Dar, after the State conceded that the issue was no longer res integra.

The High Court of Jammu & Kashmir and Ladakh has held that hoteliers whose accommodation is hired by the Department of Home are liable to pay GST on the rental income, while the Department of Home is bound to pay GST at the prescribed rate in addition to the rent fixed per room per day [M/s. Hotel Hajr v. Union Territory of J&K (Home) and Others].

A Division Bench of the Chief Justice and Justice Rajnesh Oswal disposed of the writ petition after the Senior Additional Advocate General, on instructions from the concerned authority, fairly submitted that the matter was squarely covered by the Court's earlier judgment in Haji Khazir Mohd. Dar & Ors. v. U.T. of J&K & Ors. (WP(C) No. 963/2023), pronounced on July 7, 2025.

The petitioner is a hotel whose accommodation had been hired by the Department of Home, and the dispute concerned the GST treatment of the rent received for such accommodation.

In Haji Khazir Mohd. Dar, the Court had directed that hoteliers receiving rent from the Department of Home are "legally bound to seek appropriate registration" under the CGST Act and the Jammu and Kashmir GST Act and to deposit tax at the prescribed rate with the GST authorities.

At the same time, the Department of Home was held liable to pay GST at the prescribed rate over and above the rent payable per room per day, as determined by the Government from time to time.

The earlier ruling had also directed the Home Department to start paying GST in addition to the rent with effect from August 2025, and observed that it was the right time for the Department to constitute a proper Rent Assessment Committee to revise the rentals for hotel accommodation taken on rent over several years.

Applying those directions, the Bench disposed of the present petition on the same terms.

The ruling places the compliance obligation of registration and deposit on the hoteliers, while making it clear that the tax cost is to be borne by the hiring department over and above the rent.

2026-juristway.com-3122-HC(J&K and Ladakh)-GST