Home Case Index All Cases GST GST + AAAR GST - 2023 (1) TMI AAAR This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (1) TMI 432 - AAAR - GSTExemption from GST - amount received for leasing residential hostel rooms - Exempt under sl. No.14 (Heading 9963) of Notification no 12/2017-Central Tax (Rate) dt:28.06.2017 as amended or sl. No.12 (Heading 9963) of Notification no 12/2017-Central Tax (Rate) dt:28.06.2017 as amended? - HELD THAT:- The lessee M/s. Nspira Management Services Private Limited has sub-leased the said premises to M/s. Narayana Educational Society to accommodate their students. Further, the said Narayana Educational Society are running / maintaining a 'MESS' to cater to the needs of their 'inmates' in a building adjacent to the said hostel building. Thus, it is clear that, the sub-lessee i.e. M/s. Narayana Educational Society is providing a 'bundled service' i.e. a bundle of 'Renting of accommodation' and 'supplying food and beverages service' to their 'inmates I students / clients'. In 'Guest House / Hotel / Inn etc.' the same services are provided. This is the basic difference between a 'place of Residence' and a 'Hotel / Guest House / Inn etc.'. The Place of residence, in common understanding is premises rented out / leased out to a person, where that person resides, cooks food, consumes it and 'LIVES'. Generally 'No provision for supply of Food' is existing with reference to a 'Place of Residence'. Therefore, in the instant case, the premises is put into use which is more akin to a 'Hotel / Guest House / Inn etc.' and definitely different from a 'Place of Residence' in common understanding. The exemption on “services by way of renting of residential dwelling for use as residence” envisaged under the said notification is conditional and restricted only the recipient of the services and NOT beyond. In other words, supply is the fulcrum of GST, the transaction of supply (with regard to appellant) ends with the recipient of services only, in so far as the GST is concerned. Now, from the lease document, it is clearly known that the lessee is not going to use the rented property as 'residence' by himself but only going to sub-lease or rent out to others like students of educational institutions, etc., for their use. Unless the twin conditions of 'renting of residential dwelling' for 'use as residence,' being inter-twined and inseparable, are not met, the exemption is not available. As per settled law, in taxation laws, especially when exemptions or concessions or benefits are to be availed, the interpretation is to be literally and strictly construed and not in liberal terms. If there is a conditional exemption in GST based on end-use, the end-use has to be determined with respect to facts and for the recipient of the services only from the supplier directly and it is not for the department to see how the services are finally put to use by the recipient in turn and so on. In the instant case there is no evidence to show that either the building was a residential dwelling or it is going to be put to use as residence for himself by the lessee - The lower authority has considered all the facts and details of the case and examined them in the light of the relevant provisions of the APGST Act and Rules 2017 along with relevant notifications while deciding the case.
|