TaxTMI 
TaxTMI 
2025 (12) TMI 306
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.... 2013, which is not registered under the GST regime, for a term of nine years, where the lessee will used the said property to further provide long-term residential accommodation. 3. The agreed key terms of the lease agreement relevant for the purposes of the present application are summarized as under:- a. The Lessee will use the premise for providing long-term residential accommodation to the students and working professionals (hereinafter referred to as "the Residents"), and it intends to run housing facilities for the Residents from the said property. b. The Lessee has requested the Applicant to grant on lease the residential building for the purpose of setting up and running of housing facilities for the Residents. c. The Lease of the said residential building shall remain in force for a term of 9 years unless terminated. d. In consideration, the Lessee shall pay the lease rent of Rs. 12,00,000/- per month (to be distributed among all seven owners of the property as per their share in the property), which shall be net of applicable direct and indirect taxes, if applicable, i.e., GST and/or any other applicable or increment in such taxes. ....
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....d person where,- (i) the registered person is proprietor of a proprietorship concern and rents the residential dwelling in his personal capacity for use as his own residence; and (ii) such renting is on his own account and not that of the proprietorship concern. Nil Nil W.e.f. 15 July 2024 till date SI.No. Chapter, Section, Heading, Group or Service Code (Tariff) Description of Services Rate (per cent) Condition (1) (2) (3) (4) (5) 12 Heading 9972 Services by way of renting of residential dwelling for use as residence except where the residential dwelling is rented to a registered person Explanation 1 - For the purpose of exemption under this entry, this entry shall cover services by way of renting of residential dwelling to a registered person where,- (i) the registered person is proprietor of a proprietorship concern and rents the residential dwelling in his personal capacity for use as his own residence; and (ii) such renting is on his own account and not that of the proprietorship concern Explanation 2.- Nothing contained in this entry shall apply to- (a) accommodation servi....
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....nition of 'residential dwelling' has not been provided in the GST law. Under erstwhile Service tax law, 'residential dwelling' was defined in Para 4.13.1 of Taxation of Services: An Education Guide dated 20 June 2012 (hereinafter referred to as "Education Guide") which was issued by CBIC containing clarification on many aspects. It is provided in Education Guide that in normal trade parlance, 'residential dwelling' means any residential accommodation and» is different from hotel, motel, inn, guest house, etc. which are meant for temporary stays. It can be deduced from this clarification that any residential accommodation which is used for long term stays can be referred to as 'residential dwelling' for the purposes of Service tax. In the absence of any other definition in the GST Law, the same meaning of 'residential dwelling" can be adopted under GST also. In addition, as per the judicial ruling of Hon'ble Delhi High Court in the matter of P.N. Karkhanis-MANU/DE/0238/1976, for determining whether a property is residential accommodation, it must have been constructed as a residence. (iv) Reliance is also placed on the judgement of the High Court of Bombay in the case....
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....ng is rented to a registered person, it has already been submitted that the lessee to whom the residential building will be given on rent by the applicant is not registered under the GST regime. (viii) Regarding the last condition, that the exemption is not allowed to (a) accommodation services for students in student residences and (b) accommodation services provided by Hostels, camps, paying guest accommodation and the like, it is to note that the applicant is not providing any kind of accommodation services to the lessee and rather, the applicant is renting the said property to the Lessee and lessee is providing accommodation services to its customers (Students and or working professionals). (ix) The legislative intent to the same effect can be seen from the fact that Explanation 2 containing said condition (Sixth condition) was inserted in Entry No. 12 w.e.f. 15 July 2024 when HSN code for Entry No. 12 was changed from erstwhile "Heading 9963 or Heading 9972" to "Heading 9972" only, thereby, omitting Heading 9963 from Entry No. 12. Parallelly, with effect from the same date, i.e., w.e.f. 15 July 2024, Entry No. 12A was inserted in Exemption Notification and th....
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...., having PAN ABBCA7486K, is not registered with GST. A draft agreement proposed to be entered into by the applicant and M/s Ashimara Living Private Limited was also enclosed. 8. The Jurisdiction Officer has submitted that Entry No. 12 of Notification No. 12/2017-Central Tax (Rate) dated 28 June 2017, is available only when the property rented is a residential dwelling and it is used as a residence by the recipient. In the present case, the unregistered tenant is taking the property on rent for the purpose of accommodation services/facility to students and working professionals. The Tenant is not using the property as his own residence, but is taking the same on rent for conducting a commercial activity of providing accommodation to others for consideration. Further, in addition to accommodation, the tenant may also provide other facilities such as meals/laundry/wi-fi etc. The tenant, thus, is specifically planning to use the building for commercial activity/business. Therefore, the use of the property is commercial in nature and not as residence. Thus, the exemption under the said entry is not applicable in this case. The service of renting of the said premiss amounts to 'rentin....
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....ree with the reasoning given by the applicant for the fulfilment of four conditions. We are mainly concerned with the Applicant's interpretation of the second condition i.e. the property so rented / leased out must be a residential dwelling, and the third condition i.e such residential dwelling must be given for use as a residence, which we feel is not correct. 13. The applicant's main focus to interpret their property as a residential dwelling/ residential accommodation is the dictionary meaning as well as some of the case laws. We are not going into each of these case laws but focus on some of the judgements, which we feel have a bearing on this issue. The said judgements are the judgement of the Delhi High Court in the case of P.N. Karkhanis Vs P.N.Chopra- Manu/DE/0238/1976, the Karnataka High Court judgement in the case of Taghar Vasudeva Ambrish v. Appellate Authority for Advance Ruling-MANU/KA/0327/2022 and the Madras High Court judgement in the case of Thai Mookambikaa Ladies Hostel Vs UOI-2024 (84) GSTL 209 (Mad). 14. We find that in P.N. Karkhanis case, the High Court was dealing with the eviction notice issued under the Delhi Rent Control Act to the petitioner. One ....
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....ntial category. Secondly, the Department has filed a Special Leave Petition (SLP Diary No. 29980/2022) before the Hon'ble Supreme Court against the judgement of the High Court and Leave has been granted by the Supreme Court vide order dtd. 24.11.2023. We find that the Supreme Court in Kunhayammed Vs State of Kerala-2001 (129) E.L.T. 11 (S.C.) has observed that once leave to appeal has been granted, the finality of the judgement, decree or order appealed against is put in jeopardy though it continues to be binding and effective between the parties, unless it is stayed or nullified. Similarly, in Union of India Vs West Coast Paper Mills Ltd .- 2004 (164) E.L.T. 375 (S.C.)-the Supreme Court observed that "38. * * once an appeal is filed before this Court and the same is entertained, the judgment of the High Court or the Tribunal is in jeopardy. The subject matter of the lis unless determined by the last Court, cannot be said to have attained finality. Grant of stay of operation of the judgment may not be of much relevance once this Court grants special leave and decides to hear the matter on merit." Therefore, the leave to appeal having been granted by the Supreme Court....
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....CT(R), dated 13-7-2022, the following amendment was made- (b) against serial number 12, in column (3), after the words "as residence", the following words "except where the residential dwelling is rented to registered person" shall be inserted. After this amendment, the relevant 'Description of Services' is - "Services by way of renting of residential dwelling for use as residence except where the residential dwelling is rented to registered person ". Thus, when a registered person rents the property to a registered person, the exemption is not available. Further amendments by way of Explanations clarify that the exemption would be available only if the registered person uses it as his own residence and also has not rented in the capacity of a proprietorship firm. These amendments make it clear that the intention of the Government has been to exempt only those supplies of renting of immovable property which are used as residences in the personal capacity and are not used for commercial purposes, be it by a registered person or a non registered person. We find that this is not the case for the applicant, as the lessee was not using the said property for their own residen....