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TMI Blog2020 (4) TMI 692X X X X Extracts X X X X X X X X Extracts X X X X ..... GST Act, 2017 read with Rule 104 of KGST Rules 2017 & KGST Rules 2017, in FORM GST ARA-01 discharging the fee of Rs. 5,000/- each under the CGST Act and the KGST Act. 2. The applicant states that he is a proprietary concern registered under the provisions of the Goods and Services Act, 2017. The applicant states that engaged in the business of providing affordable residential accommodation to students on a long term basis (starting from 3 to 11 months). 3. The applicant has sought advance ruling in respect of the following questions: 1. Whether exemption prescribed under entry number 13 of notification no. 9/2017- integrated tax (rate) dated. 28th June, 2017 can be sought and the lessors (here Ambrish Vasudeva and 4 others) need not cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cribed for specified activities. Entry 13 of such Notification provides that: "Services by way of renting of residential dwelling for use as residence" are exempt from GST. e. Further M/s. D TweIve Spaces Pvt. Ltd. Has entered into sub lease agreement students for providing residential accommodations with living amenities, security, entertainment facilities for a long stay for a period varying from 3 months to Il months. Thereby, D TweIve has concluded that the rental accommodation services provided by D Twelve to the students will not attract GST. Consequently, there would be no GST obligation on D TweIve in case of lease arrangement with their lessor too (Here Ambrish Vasudeva and 4 others). Therefore, D Twelve is of the opinion tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s provided by a race club by way of totalizator or a license to bookmaker in such club; i. any activity or transaction undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities." c. The applicant states that Section 7 of the CGST Act defines the scope of supply. The expression "supply" include all forms of supply such as lease, rental made or agreed to be made for a consideration by a person in the course or furtherance of business. Section 7 (1-A) guides in determining whether a supply shall be treated as supply of goods or supply of services as referred to in Schedule II. The applicant states that Schedule Il provides that Entry 2(b) reads as any lease or letting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e lessors (totally five in number) have collectively leased out their premises to the Company by way of a single agreement. Each of the lessor has owns a part of the property and they have pooled up their properties and then leased it to the Company. Further, the agreement is a single agreement and the description of the leased premises also shows that the property consists of "42 room along with the 2400 sq.ft of terrace area" on the execution date. The terms and conditions for the transaction is common and the agreement is for the entire property. Further, para 7.1 of the agreement shows very clearly that the consideration for the contract is settled at Rs. xxx per month. The consideration payable is paid to the bank accounts at a fixed p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erty. This is in the course or furtherance of business and hence as per Section 7 (1) of the CGST Act, 2017, the transaction between the lessor and the Company would constitute a "supply". Further, this would be a supply of service as per section 7 (1-A) of the CGST Act, 2017 read with the entry no. 2(b) of the Second Schedule to the CGST Act, 2017, which reads as under: "(b) any lease or letting out of the building including a commercial, industrial or residential complex for business or commerce, either wholly or partly, is a supply of services." b. Hence the lessor, of which the applicant is a part, is providing services of leasing of a building for business or commerce to the Company. The applicant is not individually providing th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... annexed to the Lease agreement and does not fit into the meaning of a dwelling which means a house. They are like hotel rooms and the entire leased premises has 42 rooms, which can by no imagination be termed as a residential dwelling. Even if the same is given for residential purposes, the services provided is not for use as residence by the lessee. Services by a hotel, inn, guest house, club site or campsite, by whatever name called, or other commercial places for residential or lodging purposes are covered by different entries in the schedule of this notification or under different notifications and this shows that rooms though given on rent for residential purposes would not amount to residential dwelling and hence the entry is not appl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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