TaxTMI 
TaxTMI 
2023 (12) TMI 510
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....out, Bengaluru-560076, being the owner of the said property and pays property tax to the BBMP; the said building is suitable for residential purposes, layout of the property, its structure, design and the plan of the property, sanctioned by the local authorities, is for usage as residential building. 3. In view of the above, the applicant has sought advance ruling in respect of the following questions: a. Whether renting of residential dwelling to the students and working women for residential purpose along with amenities and facilities such as food, furniture, appliance, cleaning, security, pest control etc., on monthly rental basis, is exempt under entry No. 12 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 or not? b. If applicant transaction is not exempt, then what is the GST rate? c. If applicant transaction is taxable, whether applicant can claim ITC on input used for providing taxable service? 4. Admissibility of the Application : The applicant claimed that the questions on which advance rulings have been sought are with regard to "Applicability of a notification issued under the provisions of the CGST Act 2017", "Admissibili....
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....an per room and attached bathroom Breakfast, lunch, dinner and evening tea/snacks, laundry, power backup, house keeping, security and RO drinking water. 6. Applicant's Interpretation of Law : The applicant furnished their interpretation of law, which is as under: 6.1 The applicant quoting scope of supply in terms of Section 7(1)(a) of the CGST Act 2017 and definitions of Outward Supply, under Section 2(83); services under Section 2(102); Land and Building in terms of Para 2 of Schedule II to Section 7; Recipient, under Section 2(93); Composite Supply, under Section 2(30); Principal Supply, under Section 2(90); Entry No. 12 of the Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, by which the services by way of renting of residential dwelling for use as residence, covered under SAC 9963 or 9972 are exempted, both original as well as amended by Notification 04/2022-Central Tax (Rate) dated 13.07.2022 submits that contract for renting of residential dwelling along with facilities is a composite supply of renting service, the Principal Supply is renting of residential dwelling, other facilities are incidental to the renting of dwelling unit, Renting of residential....
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....ome place for the discharge of a duty or the enjoyment of a benefit'. • As per the Cambridge dictionary: 'To go to live somewhere'. "Resident" As per Oxford English Dictionary • Residing, dwelling, or having an abode in a place • A person who resides permanently in a place • A permanent or settled inhabitant of a town, district etc., "Renting" 'Renting' has been defined in section 65B of Service Tax Law as "allowing, permitting or granting access, entry, occupation, usage or any such facility, wholly or partly, in an immovable property, with or without the transfer of possession or control of the said immovable property and includes letting, leasing, licensing or other similar arrangements in respect of immovable property. "Residential Building" The Education Guide issued by CBEC in 2012 clarified that the said term has to be interpreted in terms of the normal trade parlance as per which it is any residential accommodation, but does not include hotel, motel, inn, guest house, camp-site, lodge, house boat, or like places meant for temporary stay. Despite such....
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...., whether it is designed for usage as a residential unit or a commercial unit. b. How is the plan of the property sanctioned by the local authorities. c. The intention of the developer / owner of the property. d. The purpose for which the dwelling is put to use. e. The length of stay intended by the users. Applying above discussions and analysis to the Applicant's case it is crystal clear that the renting service as per the types discussed above, fall under the expression renting of residential dwelling as mentioned under entry no. 12 of Notification No. 12/2017-Central Tax (Rate) dated 28/06/2017. 6.3 Analysis of Second essential requirements of entry 12 of notification 12/2017 CTR as under; Applicant submits that, mere renting of residential dwelling is not sufficient for claiming exemption. The latter part of the action i.e., use of such residential dwelling should be for residence. "for use as residence" The word "as" means, "as it is" without any change. Therefore, in order to claim exemption under notification no. 12/2017, the recipient of service should use the residential dwelling for residential purpose. The rent....
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.... It is very much evident from the facts of the case that the tenants/users are Students and women who are individuals unregistered under GST Law and they are not required to be registered. 6.6 Analysis of fourth essential requirements of entry 12 of notification 12/2017 CTR as under; (d) Exemption is not applicable if residential dwelling is used for commercial purpose; In the above paragraphs it is explicitly made clear that, lessee is not permitted to use the residential dwelling for commercial purpose, hence the final requirement is also met by the Applicant. 6.7 In nutshell it is understood that the exemption covers renting of residential dwelling without intention to reside permanently or not. The exemption entry specifies, services by way of renting of residential dwelling for use as residence except where the residential dwelling is rented to a registered person". 6.8 Applicant submits that for better understanding of the exemption entry it is important to refer entries which are taxable for other renting services, which are re-produced as under; Entry No.7(i) of Notification No. 11/2017 dated 28.06.2017 Central Tax Rate, specifies rentin....
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.... the similar issue it was held that, exemption can be claimed for renting / leasing of residential dwelling to the students and working women. Relying on the Hon'ble Supreme Court decision in the case of Kishore Chandra Singh v. Babu Ganesh Prasad Bhagat AIR 1954 SC 316, (Refer Enclosure - 5) Court held that, expression residence only connotes that a person eats, drinks and sleeps at that place and not necessarily that the person should own it. Stated that, 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 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. 6.12 Applicant wishes to place reliance on Hon'ble Supreme Court decision in the case of S.P JAIN Vs KRISHNA MOHAN GUPTA & ORS, 1987 AIR 222, 1987 SCR (1) 1986, Dt: 04/12/1986, (Refer Enclosure - 6) wherein it was observed that in this connection reference may be made to the meaning of 'dwelling house' in Corpus Juris Secundum Vol, 28 pages 604-605 where dwelling place is mentioned. See....
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....bitation and (2) the intention to remain there permanently that is, for an unlimited time. In its ordinary sense the word "reside" carries with it the idea of permanence, that is for any length of lime, as well as, continuity. The word "residence" denotes a dwelling house where a person lives in a settled abode. 18. In another sense, residential, house is a dwelling house as distinct from a house of business, warehouse, office, shop etc. Residential house is a building, used as a place of. abode, in which, people reside or dwell in contradistinction to one which is used for commercial or business purposes 6.15 Hon Ide Delhi High Court in Indian Cable Company Limited vs Prem Chandra Sharma 39 (1989) DLT 87, 1989 (17) DRJ 53, 1989 RLR 495, Dt: 05/05/1989, (Refer Enclosure - 9) at para 21 held that, In India, the Act applies to residential premises let out to a company also. Although, the word "residence", in its strict sense, by itself, is inappropriate with regard to a company yet, for purposes of the Act, there is nothing inappropriate in a company entering into a lease in respect of premises let for use as a residence. Indeed, the appellant company did take the demised....
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....ions, a reference to the CGST Act would also mean reference to the corresponding similar provisions in the KGST Act. 9. We have considered the submissions made by the applicant in their application for advance ruling. We also considered the issues involved on which advance ruling is sought by the applicant and relevant facts along with the arguments made by the applicant 8s the submissions made by their learned representative during the time of hearing. 10. The applicant is engaged in the business of renting of an immovable property, claiming the same as a residential dwelling basis the said building is suitable for residential purposes and also layout of the property, its structure, design and the plan of the property, sanctioned by the local authorities, is for usage as residential building; pays property tax to the BBMP, being the owner of the said property; provides three types of renting services of units having capacities of single occupancy, double occupancy and triple occupancy, on monthly rental basis with the following facilities. • Cot with mattress, table with chair and cupboard with locking facility, one light and one fan per room and attached bathro....
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....NIL NIL Entry at SI.No. 14 was omitted vide Notification No. 4/2022 dated 13.07.2022. Thus in effect only services by way of renting of residential dwelling for use as residence are exempted from GST. Services by a hotel, inn, guest house, club or campsite by whatever name called, for residential or lodging purposes when supply is below One thousand rupees are liable to GST w.e.f. 18.07.2022. 14. The applicant, at para 3 of column 15 of the application (annexure-II to the application), admitting that they provide renting services of units i.e. portion of a room with beds for single/double/triple occupancy in a residential dwelling, along with certain facilities to the inhabitants, claims that the immovable property being used for providing accommodation is a residential dwelling and is used as residence by the inhabitants and thereby the rent received on such accommodation qualifies for GST exemption in terms of entry number 12 of Notification 12/2017-Central Tax (Rate) dated 28.06.2017. In view of the said claim, the core issue before us to decide is whether the accommodation being provided by the applicant to the inhabitants qualify to be a residential dwelling, for use ....
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....dividually and not for a room as a whole. It is apparent from the above that the accommodation provided to each of the inhabitant is not a residential dwelling but a cot / a unit in the room; un-related people share the said room and invoices are raised per bed on monthly basis are not characteristic of a residential dwelling. 17. Further, it is also an admitted fact that the accommodation being provided by the applicant, out of the immovable property claimed as residential dwelling, does not have individual kitchen facility to each of the inhabitant and also cooking of food by inhabitants is not allowed, which are an essential characteristic for any permanent stay. On this count as well, the impugned accommodation being provided does not qualify to be a residential dwelling and thus the question of using the same as residence does not arise. 18. The Residential Service Agreement (RSA) entered by the applicant with the inhabitants reveals the following information, in addition to others: a) The resident/inhabitant agrees to avail the services offered by the service provider (applicant) at the unit within the premises, (para-1) b) The minimum term of the RSA ....
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....applicant are akin to provision of unit of accommodation in a paid guest house or a hostel and does not qualify to be a residential dwelling. Also the facilities such as food, furniture, appliance, cleaning, security, pest control etc., being provided by the applicant to the resident are not optional and the resident cannot choose the service provider. These facilities are mandatorily provided by the applicant and included in the monthly charges. Also the essentials like electricity and water are not charged based on usage, but a fixed amount is charged. Thus the service provided by applicant are unit accommodation for residence and not renting of residential dwelling. 20. The applicant have put forth their argument relying on the judgment of the Hon'ble High Court of Karnataka in the case of Taghar Vasudeva Ambarish (WP No. 14891 of 2020(T-Res) dated 7-2-2022). It is pertinent to mention here that the said Judgment has been appealed against before the Hon he Supreme Court of India, under the Special Leave Petition (Civil) No. 29980/2022. Further the issue dealt/covered in the WP No. 14891/2020 by the Hon'ble High Court of Karnataka was about the renting of the residenti....