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TMI Blog2022 (6) TMI 193X X X X Extracts X X X X X X X X Extracts X X X X ..... t mention as to whom the said services to be supplied. The exemption given in Sr. No. 12 mentioned above is qua the supply of service and not qua the recipient of the supply. We therefore agree with the contention of the applicant that, Serial No.12 of Notification No.12/2017-CT (Rate) and the corresponding Notification under MGST Act, 2017, is very clear wherein it gives exemption to the nature of the property and its usage and not by the status of recipient - It is a fact that the impugned residential properties will be used as residences by the staff of LIC and we therefore hold that, such services will be covered under the above mentioned Sr. No. 12 of Notification No.12/2017-CT (Rate) dated 28.06.2017 as amended. Further, if a residential property was either used or let out for commercial purposes then it would be classified as a service provided and attract GST. Only property let out for residential purposes will be exempt from the GST ambit. The GST applicability is not decided by the nature of the property but by the purpose for which it is used. To reiterate, it is not the nature of the property but the nature of the end use that will determine whether it is a commercial r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 17. At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to any dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, the expression 'GST Act' would mean CGST Act and MGST Act. 2. FACTS AND CONTENTION - AS PER THE APPLICANT 2.1 The Applicant is owner of properties containing 22 Nos. of residential apartments. The Applicant fixes rentals / license fee for residential apartments at Rs.145/- per sq.ft. There is no dispute that SI. No. 12 of the Notification No. 12/2017-CT (Rate) and ST(Rate) is applicable for renting out/giving license the property to individual owner for their residential use. 2.2 Applicant proposes to let out on Leave and License Basis the said premises to M/s. Life Insurance Corporation of India for residential purpose of their staff members and the Ruling is sought on the applicability of SI. No.12 of the Notification No. 12/2017-CT (Rate) on the said trans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd written submissions. We heard both the sides. 05. DISCUSSIONS AND FINDINGS 5.1 We have gone through the facts of the case, documents on record and submissions made by the applicant as well as the jurisdictional officer. 5.2 The Applicant M/s Kasturi Sons, has submitted that they are the owners of properties containing 22 numbers of residential apartments and proposes to let out on Leave and License basis, the said premises to M/s. Life Insurance Corporation of India (LIC) for residential purpose of their staff members on fixed rentals / license fee. The said residential apartments leased to LIC are going to be used only for residential purpose as per specific restriction for usage for commercial purpose at Clause 4.1 of the proposed agreement and accordingly the subject question is asked by the applicant. 5.3 Under G5T Laws pure renting or leasing activity is a supply of services. To understand the subject issue we need to first find out under which Service Accounting Code (SAC) does the impugned service fall. The property that is being leased out in the instant case is a residential property belonging to the applicant. The said property is being given on lease ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation/retirement. It is a fact that the impugned residential properties will be used as residences by the staff of LIC and we therefore hold that, such services will be covered under the above mentioned Sr. No. 12 of Notification No.12/2017-CT (Rate) dated 28.06.2017 as amended. Further, if a residential property was either used or let out for commercial purposes then it would be classified as a service provided and attract GST. Only property let out for residential purposes will be exempt from the GST ambit. The GST applicability is not decided by the nature of the property but by the purpose for which it is used. To reiterate, it is not the nature of the property but the nature of the end use that will determine whether it is a commercial rent or residential rent. 5.8 The jurisdictional officer has submitted that LIC is commercial organisation and hence the staff to whom the flat is let out can sit late in office and work more. LIC is not natural person and LIC is profit making company. So, in order to increase profit, the facility of quarter given to employee, which is a commercial use and not for residential use. The monthly license fee received from L1C on the letting out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out to individuals or a commercial entity. Held that the Applicant's service of renting/leasing out the dwelling units for residential purpose was, exempt under Si No. 12 of the Exemption Notification No. 12/2017-CT (Rate) dated 28.06.2017, as amended from time to time and the Applicant, therefore, was not liable to pay tax on supply of such service. 5.10.2 The subject case is very similar to the case of leasing of property for residential use given to M/s Larsen Toubro by M/s Borbheta Estate Pvt Ltd mentioned above and therefore the ratio of the above mentioned order is applicable in the subject case also. 06. In view of the extensive deliberations as held hereinabove, we pass an order as follows: ORDER (Under section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017) For reasons as discussed in the body of the order, the question are answered thus - Question: - Whether Applicant is eligible for the exemption from payment of GST on the monthly license fee to be received by them on the proposed letting out on Leave and License Basis of their residential building at Flat No. 19, admeasuring 13 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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