Renting of residential dwelling excluded from service tax when used as residence; commercial or hotel use is taxable.

Services by way of renting of a residential dwelling for use as residence are excluded from service tax under the negative list; 'renting' includes permitting occupation or use of immovable property. Residential dwelling excludes hotels, motels, inns, guest houses, lodges, house boats and similar temporary stay places. Predominant non residential or commercial use of a rented house (including hotels or lodges) removes the exemption. Mixed residential and non residential use is assessed under bundled service principles; bona fide reasonable short term family stays remain residential, while frequent short stays by different persons indicate taxable commercial use.

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