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2021 (4) TMI 86 - AAR - GSTClassification of supply - Composite supply or not - leasing of property for use as residence along with basic amenities - renting of property - leasing of property for residential subletting - Exemption Notification 12/2017 (Rate) dated June 28, 2017 - HELD THAT:- A Rooming house is a residential house, of which most or some of the rooms are rented out to paying customers. It is a place where individuals who are living in rent in that house shares the bathroom and the kitchen. The Explanatory Notes to the Scheme of Classification of Services stipulates, at the exclusion clause to the SAC 997211, that accommodation services provided by rooming houses are covered under SAC 99631. Further SAC 996311 covers Room or unit accommodation services and includes accommodation services consisting of rooms or units, with or without kitchens & with or without daily housekeeping services, provided by Hotels, INN, Guest houses, Clubs & other similar establishments on a single or multi occupancy basis, for purposes of leisure or business or others - the services of the applicant squarely get covered under SAC 996311 as accommodation services and hence the said services are not covered under renting of residential dwelling. It is pertinent to mention here that the “Goods and Services Tax” (GST) is a transaction based tax, with seamless input tax credit at each transaction level. In the instant case two transactions are involved. The first being a transaction between the applicant & the business entity and the second between the business entity & the actual tenant. Thus the two transactions are different and the taxability / exemption of these transactions need to be examined individually. In the transaction between the applicant & business entity, the renting of residential welling is not for use as residence by the business entity but in the course or furtherance of the business of the said entity and hence the exemption under entry No.12 of Notification 12/2017-Central Tax (Rate) dated 28.06.2017 is not applicable to the impugned transaction. On the other hand in the transaction between the business entity and the tenant, the service amount to renting/leasing of rooming house which falls under accommodation services that get covered under SAC 996311 and hence the exemption under entry No.12 of Notification 12/2017-Central Tax (Rate) dated 28.06.2017 would not be applicable to the said transaction. Leasing of property for use as residence along with basic amenities, in the instant case, is covered under accommodation services, as ruled in the preceding paras, falls under SAC 996311 and hence would qualify as composite supply under Section 2(30) of the CGST/KGST Act, 2017 - Renting of property by Applicant is not covered under entry 12 of Notification 12/2017-Central Tax (Rate) dated 28.06.2017, as their services are covered under accommodation services falling under SAC 996311 - the exemption under entry 14 of Notification 12/2017-Central Tax (Rate) dated 28.06.2017 is available to the transaction of the applicant - Leasing of property for residential subletting would not be covered under the exemption for residential dwelling under entry 12 Notification 12/2017-Central Tax (Rate) dated 28.06.2017, as the two are different and individual transactions.
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