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TMI Blog2020 (6) TMI 769X X X X Extracts X X X X X X X X Extracts X X X X ..... h in return uses the facility to accommodate their students. Whether amount received for leasing residential hostel rooms is exempt under Sl.No.12 (Heading 9963) of Notification No.12/2017-Central Tax (Rate) dated 28.06.2017 as amended upto 25.01.2018? - HELD THAT:- In the instant case, it is evident from the above reading, that the property under question is not a home or residence being used by a family or group of a members maintaining a regular house hold, but used for commercial purposes of accommodating students in bulk numbers. A temporary stay of the students will not merely qualify the purpose for use as residence and hence it is not qualified to be listed under heading 9963 or 9972. The activity under question is non residential property rented out for commercial activity and supply of such services, in the facts and circumstances of the case, are classifiable as Rental or leasing services involving own or leased non-residential property under Service Code (Tariff) 997212. It is taxable in the hands of the lessor and is liable for IGST at the rate of 18 percent. - AAR No.18 AP/GST/2020 - - - Dated:- 15-6-2020 - SRI. D. RAMESH, AND SRI. M. SREEKANTH, MEMBE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the building is labeled as West Block in the building permit. The West block consisting of 170 rooms is leased en bloc to M/s. Nspira Management Services Private Ltd to house resident students. The final occupancy certificate was issued by APCRDA vide file no. CRDA-12031(37)/68/2016-Asst Plng Off-Devc-APCRDA dt. 30-05-2017. The applicant submits that the following transactions fall under: a) Services by way of renting of residential dwelling for use as residence, b) Services by a hostel, guest house, club or campsite, by whatever name called, for residential or lodging purposes, having declared tariff of a unit of accommodation below one thousand rupees per day or equivalent, and c) Renting or leasing of immovable property for non-residential purpose. The applicant strongly believes that he is not liable to pay Goods and Services Tax on leasing or renting of these hostel rooms of West Block which are essentially' 170 individual dwelling units which are let out en bloc exclusively for residential purpose to a commercial entity, and services by way of renting of dwelling units for residence is exempted under SI No. 12 of Exemption Notification No. 12/20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 12/2017-CT (Rate). Circular No. 32/06/2018-GST dt. 12.2.2018 also confirms the same clarification. The applicant does not provide any additional services like food, housekeeping, and laundry to the inmates of the hostel. Hence the question of mixed supply or composite supply does not arise. Renting of hostel rooms is the only single service activity the applicant engages in this transaction under review. The applicant receives a monthly lump sum amount of from the tenant M/s. Nspira Management Services Private Ltd for providing taxable service of hostel accommodation under notification No. 12/2017 (Rate) illustrating as lodging purpose, having a declared tariff of a unit of accommodation below rupees one thousand per day or equivalent which needs to be treated as an exempt supply. The monthly amount received from the tenant when proportioned among 170 rooms on a 30-day basis comes to mere ₹ 196/-per day per room which is below the stipulated thresh hold limit of ₹ 1000/- per day per unit of accommodation. The applicant refers to Ruling pronounced by Maharashtra Authority for Advance Ruling in the case of M/s. Students' Welfare Association, Pune vide its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he applicant is eligible for claiming exemption under Sl. No. 12 of notificationNo.12/2017-CT (Rate) even though the scheduled property is let out to a commercial entity as en bloc to use as dweIIing units. 6. Record of Personal Hearing: Sri K. Srcenivasa Reddy, the authorized representative of the applicant appeared for Personal Hearing on 11.11.2019 and reiterated the same. The applicant presented the following submissions at the time of Personal Hearing. 7. Discussion and Findings: We have examined the issues raised in the application. The taxability, classification of the services, applicable rate of tax, eligibility of exemption etc., for the goods and services supplied or to be supplied, as governed under the provisions of respective GST Acts are examined. With reference to the information on record, and as per the Lease Deed submitted by the applicant between himself (the Lessor) and the Lessee i.e, M/s. Nspira Management Services Private Limited, it is evident that the Lessor has agreed to give 84,251 Sq ft (approx.) of built up area, for a monthly rent of ₹ 9,99,746 for the built up area of the said premises. Moreover, the clause 6 of the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g services to the students under the style and name of his registered trade name with a declared tariff of a unit of accommodation below one thousand rupees per day or equivalent to avail the exemption under the notification. The service recipient, i.e., the Lessee in this regard, further sublets the property to the Narayana Educational Society, which in return uses the facility to accommodate their students. Now we examine, the second issue, whether amount received for leasing residential hostel rooms is exempt under Sl.No.12 (Heading 9963) of Notification No.12/2017-Central Tax (Rate) dated 28.06.2017 as amended upto 25.01.2018? Sl.No. 12 of Heading 9963 or Heading 9972 describes Services by way of renting of residential dwelling for use as residence as Nil rated. The applicant is rather renting his immovable property consisting of 170 hostel rooms with attached bathrooms to the lessee for the purpose of commercial activity, who in turn sub leases it to Narayana Educational Society for the purpose of accommodating students. Now we examine whether the property is a residential dwelling and it is also used for purpose of residence only. Residential dwelling is not define ..... 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