Entire Villa Rental Treated as One Unit for GST: Advance Ruling

The Advance Ruling Authority clarified that for the applicant's business of renting out entire luxurious villas, the entire villa would be considered the "per unit" under Entry no. 7 of Notification No. 11/2017-Central Tax (Rate) dated 28 June 2017. The ruling highlighted the unique rental model where the villa was rented as a whole to a single client, aligning with the context and perspective of the rental activity. The decision was based on the specific circumstances of the applicant's business, emphasizing the indivisibility of the villa and the absence of individual room bookings, leading to the entire villa being treated as the unit for GST rate determination.

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Issues Involved:
1. Interpretation of the term "Per Unit" under Chapter Section or Heading-9963 of Notification No. 11/2017-Central Tax (Rate) dated 28 June 2017.

Analysis:

Issue 1: Interpretation of "Per Unit" under Notification No. 11/2017-Central Tax (Rate)

The applicant, engaged in renting luxurious villas, sought clarification on whether the term "Per Unit" refers to the entire villa or individual rooms within the villa for the purpose of determining the GST rate. The applicant contended that the villa should be considered a unit, as only one client can book the entire villa at a time. The jurisdictional officer supported this view, emphasizing that the context of renting and the declared tariff should guide the interpretation. The Advance Ruling Authority examined the facts and submissions, concluding that the entire villa would be treated as "per unit" under the notification. This decision was based on the applicant's rental model, where the villa was indivisible and rented as a whole to a single client, precluding the booking of individual rooms. The authority distinguished previous judgments related to hotel rooms and hostel beds, as they were not directly applicable to the current scenario. The ruling emphasized the importance of the rental pattern in defining the unit of accommodation, affirming that the villa, in this case, constituted the "per unit."

In conclusion, the Advance Ruling Authority clarified that for the applicant's business of renting out entire luxurious villas, the entire villa would be considered the "per unit" under Entry no. 7 of Notification No. 11/2017-Central Tax (Rate) dated 28 June 2017. The ruling highlighted the unique rental model where the villa was rented as a whole to a single client, aligning with the context and perspective of the rental activity. The decision was based on the specific circumstances of the applicant's business, emphasizing the indivisibility of the villa and the absence of individual room bookings, leading to the entire villa being treated as the unit for GST rate determination.

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