Accommodation Services provided to Students and Working Professionals in Hostel would fall within ambit of Residential Accommodation to qualify for exemption

Accommodation Services provided to Students and Working Professionals in Hostel would fall within ambit of Residential Accommodation to qualify for exemption

2022 (2) TMI 780 - Karnataka High Court in Taghar Vasudeva Ambrish Versus Appellate Authority For Advance Ruling, Karnataka,

Brief Facts

1. Property is a residential property having 42 rooms
2. Petitioner along with other co-owners have executed a lease deed in favour of the lessee
3. The lessee has leased out the residential property as Hostel for providing long term accommodation to students and working professionals with the duration of stay ranging from 3 months to 12 months.
4. Notification No.9/2017 - Integrated Tax (Rate) dated 28.06.2017 provides for exemption on Services by way of renting of residential dwelling for use as residence

Issue Involved

Whether services provided to the person residing in hostel would fall within the ambit of residential dwelling

Hon’ble Court Observations and Order

1. It is settled rule of Statutory Interpretation of fiscal statues that the words used therein if not defined in the statute have to be interpreted in their popular sense.
2. Expression 'residential dwelling' has to be understood according to its popular sense.
3. When the word is not defined in the Act itself, it is permissible to refer to the dictionaries to find out the general sense in which the word is understood in common parlance.
4. Education guide issued by Central Board of Indirect Taxes and Customs which contains clarifications, it is provided that in normal trade parlance residential dwelling means any residential accommodation and is different from hotel, motel, inn, guest house etc. which is meant for temporary stay. The aforesaid clarification which is issued by the Board, in the absence of anything to the contrary in the Act, binds the Respondent.
5. Expression 'residence' and 'dwelling' have more or less the connotation in common parlance and therefore, no different meaning can be assigned to the expression 'residential dwelling' and it cannot be held that the same does not include hostel which used for residential purposes by students or working women.

Petitioner is registered as commercial establishment is wholly irrelevant for the purposes of determining the eligibility of the petitioner under the exemption notification.