Exemption in relation to Renting of Immovable Property [ Entry No. 12 and 12A of CGST] - GST Ready Reckoner - GST

Exemption Entry 12 Exemption in relation to Renting of immovable property 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 services for students in student residences; (b) accommodation services provided by Hostels, Camps, Paying Guest accommodations and the like. [ Notification No. 04/2024- CT (Rate) Dated 12th July 2024 ( w.e.f. 15th July 2024).] Exemption Entry 12A inserted vide Notification No. 04/2024- CT (Rate) Dated 12th July 2024 (w.e.f. 15th July 2024). Supply of accommodation services having (a) value of supply less than or equal to ₹ 20,000/- per person per month, and (b) the accommodation service is supplied for a minimum continuous period of 90 days. Important Case Laws The issue with regard to interpretation of exemption notification is no longer res integra has answered in the Commissioner of Customs (Import), Mumbai v. M/S Dilip Kumar and Company Ors. . [ For more details refer this link ] The hostel accommodation services provided by the Applicant would be eligible for exemption under Serial Number 12 of Notification 12/2017-CT (Rate) dated 28th June 2017, but it is addressed in the case of M/S. Maharashtra Jain Education Society - 2024 (8) TMI 294 Maharashtra . ​​​​ For reasons as discussed in the body of the order, the reframed questions based on duration of stay in the hostel are answered thus - Question 1: Whether the hostel accommodation services provided by the Applicant for duration of stay of 10 months would be eligible for exemption under Serial Number 12 of Notification 12/2017-CT (Rate) dated 28th June 2017? Answer:- Affirmative Question 2: Whether the hostel accommodation services provided by the Applicant for duration of stay of one or two months to new students during vacation period would be eligible for exemption under Serial Number 12 of Notification 12/2017-CT (Rate) dated 28th June 2017? Answer:- Negative. Question 3: Whether the hostel accommodation services provided by the Applicant for duration of stay of one or two months to old students during vacation period would be eligible for exemption under Serial Number 12 of Notification 12/2017-CT (Rate) dated 28th June 2017? Answer: - Affirmative. Leasing out residential premises as hostel to students and working professionals is covered under Entry 13 of Notification No.9/2017-IGST(Rate) dated 28.09.2017 namely 'Services by way of renting of residential dwelling for use as residence' issued under the Act. The petitioner is held entitled to benefit of exemption notification. [ Taghar Vasudeva Ambrish Versus Appellate Authority For Advance Ruling, Karnataka, Commissioner of Central Tax Bangalore, Assistant Commissioner of Commercial Taxes Lgsto-90, Bengaluru - 2022 (2) TMI 780 - Karnataka High Court ] Important Notification Clarification (1) GST liability on certain accommodation services. [ Circular No. 228 /2 2/2024-GST dated 15/07/2024 ] 9.1 Representations have been received requesting to clarify whether service by way of hostel accommodation, service apartments/hotels booked for longer period is a service of renting of residential dwelling for use as residence and exempted under entry at SI. No. 12 of notification No. 12/2017-CT(Rate) dated 28.06.2017 . Requests have also been received for GST exemption on hostels for poor and middle-class students run by charitable trusts. 9.2 The matter was placed before the GST Council in its 53rd meeting held on 22nd June, 2024 and the GST Council recommended to exempt the supply of accommodation services having value of supply less than or equal to twenty thousand rupees per person per month provided that the accommodation service is supplied for a minimum continuous period of ninety days. The same has been exempted w.e.f. 15.07.2024 vide notification No. 4/2024-CT(R) dated 12.07.2024 . 9.3 In its 53rd meeting , the GST Council further recommended extending the benefit for past cases provided that value of supply of accommodation services supplied was less than or equal to twenty thousand rupees per person per month and that the accommodation service was supplied for a minimum continuous period of ninety days. 9.4 Thus, as recommended by the GST Council, GST liability on the supply of accommodation services is regularized on 'as is where is' basis for the period from 01.07.2017 to 14.07.2024 where value of supply of the accommodation service is less than or equal to twenty thousand rupees per person per month and the said accommodation service was supplied for a minimum continuous period of ninety days. 2. Categories of services on which tax will be payable under reverse charge mechanism (RCM) w.e.f. 10.10.2024 vide Notification No. 09/2024- Central Tax (Rate) Dated 08.10.2024 Entry No. Type of Services From To 5AB Service by way of renting of any immovable property other than residential dwelling. Any unregistered person Any registered person.