MUMBAI: The GST-Authority for Advance Ruling (GST-AAR), Karnataka bench examined the GST implications of renting of residential dwellings to college students and dealing girls, together with the availability of assorted amenities.
On the identical strains, as adopted earlier by the GST-AAR in different cases, notably, within the case of Bengaluru based mostly Srisai Luxurious Keep and Noida based mostly VS Institute and Hostel, the AAR held the availability of lodging and providers to be akin to that of a hostel or visitor home which is topic to GST at 12%.
Deeksha Sanjay, a proprietor engaged within the enterprise of renting of residential dwellings, sought a ruling on whether or not the renting of residential dwellings together with facilities can be exempt underneath Entry No 12 of Notification No.12/2017, dated June 28, 2017. If not exempt what can be the relevant items and providers tax (GST) fee and lastly whether or not enter tax credit score may be claimed in respect of inputs used for offering the taxable providers.
This proprietary concern offered residential lodging to college students and dealing girls on a single, double or triple occupancy per room on a month-to-month rental foundation. The rooms with connected loos contained a cot with mattress, desk with chair and cabinet with locking facility, one gentle and one fan. As well as, breakfast, lunch, dinner and night tea with snacks had been obtainable. Facilities reminiscent of laundry, energy backup, housekeeping, safety and consuming water had been obtainable.
The AAR noticed: All of the above phrases and situations of the settlement reveal that the impugned lodging being offered by the applicant are akin to provision of a unit of lodging in a paid visitor home or a hostel and doesn’t qualify to be a residential dwelling. Additionally, the amenities reminiscent of meals, furnishings, home equipment, cleansing, safety, pest management and so forth being offered by the applicant to the resident aren’t non-obligatory and the resident can’t select the service supplier. These amenities are mandatorily offered by the applicant and included within the month-to-month prices. Additionally, the necessities like electrical energy and water aren’t charged based mostly on utilization, however a hard and fast quantity is charged. Thus, the providers offered by the applicant are unit lodging for residence and never renting of residential dwelling. These providers can be topic to GST at 12%, nevertheless enter tax credit score can be obtainable.
It ought to be famous that advance rulings are binding on the applicant and the tax authorities in respect of the transaction for which the ruling was sought. Nonetheless, they do have a persuasive worth in evaluation of comparable circumstances.
On the identical strains, as adopted earlier by the GST-AAR in different cases, notably, within the case of Bengaluru based mostly Srisai Luxurious Keep and Noida based mostly VS Institute and Hostel, the AAR held the availability of lodging and providers to be akin to that of a hostel or visitor home which is topic to GST at 12%.
Deeksha Sanjay, a proprietor engaged within the enterprise of renting of residential dwellings, sought a ruling on whether or not the renting of residential dwellings together with facilities can be exempt underneath Entry No 12 of Notification No.12/2017, dated June 28, 2017. If not exempt what can be the relevant items and providers tax (GST) fee and lastly whether or not enter tax credit score may be claimed in respect of inputs used for offering the taxable providers.
This proprietary concern offered residential lodging to college students and dealing girls on a single, double or triple occupancy per room on a month-to-month rental foundation. The rooms with connected loos contained a cot with mattress, desk with chair and cabinet with locking facility, one gentle and one fan. As well as, breakfast, lunch, dinner and night tea with snacks had been obtainable. Facilities reminiscent of laundry, energy backup, housekeeping, safety and consuming water had been obtainable.
The AAR noticed: All of the above phrases and situations of the settlement reveal that the impugned lodging being offered by the applicant are akin to provision of a unit of lodging in a paid visitor home or a hostel and doesn’t qualify to be a residential dwelling. Additionally, the amenities reminiscent of meals, furnishings, home equipment, cleansing, safety, pest management and so forth being offered by the applicant to the resident aren’t non-obligatory and the resident can’t select the service supplier. These amenities are mandatorily offered by the applicant and included within the month-to-month prices. Additionally, the necessities like electrical energy and water aren’t charged based mostly on utilization, however a hard and fast quantity is charged. Thus, the providers offered by the applicant are unit lodging for residence and never renting of residential dwelling. These providers can be topic to GST at 12%, nevertheless enter tax credit score can be obtainable.
It ought to be famous that advance rulings are binding on the applicant and the tax authorities in respect of the transaction for which the ruling was sought. Nonetheless, they do have a persuasive worth in evaluation of comparable circumstances.
