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of <h1>Property leased for commercial use loses residential dwelling status and GST exemption under notification 05/2022</h1> <h3>In Re: M/s. Deepak Jain</h3> In Re: M/s. Deepak Jain - 2024 (85) G. S. T. L. 377 (A. A. R. - GST - Raj.) Issues Involved:1. Whether the demised premises will be covered in the definition of residential dwelling for the purpose of notification No. 05/2022-Central Tax (Rate) dated 13/07/2022.2. Factors important to include in the definition of residential dwelling.Summary:Issue 1: Definition of Residential DwellingThe applicant, an unregistered Chartered Accountant, leased a property to a company for commercial use. The property, although residential by land use, is used by the lessee for establishing a branch/office. The applicant sought clarity on whether the demised premises would be considered a residential dwelling under notification No. 05/2022-Central Tax (Rate) dated 13/07/2022. The authority examined the lease agreement, which specified the property's use for commercial purposes, and the electricity bill indicating a commercial connection. It concluded that the property is leased for commercial use and does not qualify as a residential dwelling under the said notification. Therefore, the renting service is taxable at 18% under forward charge, and the lessee is not required to pay GST under RCM.Issue 2: Factors for Definition of Residential DwellingThe applicant sought clarity on the factors important for defining a residential dwelling. The authority referred to various dictionaries and legal precedents to determine that the primary factors are the purpose for which the dwelling is put to use and the length of stay intended by the users. The authority emphasized that the structure and intent of use are paramount in determining whether a property qualifies as a residential dwelling.Ruling:1. The demised premises will not be covered in the definition of residential dwelling as per notification No. 05/2022-Central Tax (Rate) dated 13/07/2022 because it is used for commercial purposes.2. The important factors to include in the definition of residential dwelling are the purpose for which the dwelling is put to use and the length of stay intended by the users.
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