Applicant Name:

Lakshmi Tulasi Quality Fuels

Application No.:

AAR No. 12/AP/GST/2020

Ruling pronounced by:

GST AAR Andhra Pradesh

Date of Ruling:

05-05-2020

• The applicant is a registered taxable person engaged in supply of petroleum oils and lubricants. The applicant is the absolute owner of a residential building in Telengana.

• The applicant has entered into a lease agreement with D-Twelve Spaces Private Limited (Lessee) which is engaged in the business of running, managing and operating residential premises and sub-lease of such residential premises to individuals (including students) for the purpose of long term stay accommodation.

• As per the lease deed, the lessee shall have the right to engage with third-party service providers for all activities required for the purpose including food catering, hospitality, security, cleanliness, event organization, transportation, management and supervision of the total property.

• The applicant contends that she is eligible for exemption from payment of GST under Sl. No. 13 of Exemption Notification No. 9/2017 dated 28-06-2017 under head “Services by way of renting of residential dwelling for use as residence”.

Question

Observations

Ruling

Whether she is eligible for GST exemption for leasing residential building to D-Twelve Spaces Private Limited as per Sl. No. 13 of Notification No. 9/2017 dated 28-06-2017

• Though the applicant claims that she has rented out residential dwelling for use as residence, it appears that the premises is a non-residential property.
• It is clear that the lessee is engaged in commercial activity of renting of rooms in the dwelling and providing boarding and hospitality services to inmates.
• Therefore, the leasing services in case of lessor is classifiable as “Rental or leasing services involving own or leased non-residential property” under SAC 997212.

The services rendered by lessor is covered under SAC 997212 and thus liable for IGST @ 18%. Exemption under Entry No. 13 of Notification No. 9/2017 (Integrated Tax) (Rate) dated 28-06-2017- “Services by way of renting of residential dwelling for use as residence” is not applicable to the present case.