TMI Blog2023 (12) TMI 510X X X X Extracts X X X X X X X X Extracts X X X X ..... te, lodge, house boat, or like places meant for temporary stay. Therefore it could be inferred from the above that residential dwelling is a residential accommodation meant for permanent stay and does not include guest house, lodge or like places. A residential accommodation to qualify for permanency of stay would typically have at least one room for exclusive use, a kitchen or facility to cook, essentials like electricity, water provided through metered/sub-metered connections or charged on actual usage, among others. The resident/inhabitants are offered a unit i.e a portion of a room with a cot on monthly rental basis. Further monthly rent also is charged and collected for the unit only but not for the residential dwelling. Thus the impugned accommodation being provided does not qualify to be a residential dwelling. Further it is seen that units are shared by one or more unrelated inhabitants. Applicant charges all the inhabitants of a room individually and not for a room as a whole. It is apparent that the accommodation provided to each of the inhabitant is not a residential dwelling but a cot / a unit in the room; un-related people share the said room and invoices are raise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... HELD THAT:- The applicant can claim ITC on inputs used for providing the impugned taxable services subject to fulfilment of the conditions stipulated under Sections 16 17 of the CGST Act 2017 and the rules made thereunder. - DR. M.P. RAVI PRASAD AND SRI. KIRAN REDDY T, MEMBER Represented by : Sri. Sanjay M Dhariwal, C.A., 8 Authorised Representative ORDER UNDER SECTION 98(4) OF THE CGST ACT, 2017 AND UNDER SECTION 98(4) OF THE KGST ACT, 2017 Ms. Deeksha Sanjay (herein after referred to as 'Applicant ), Proprietrix, M/s Deeksha Sanjay, #14, 2nd Cross, Thimmappa Reddy Layout, Bengaluru - 560 076, Karnataka, having GSTIN number 29EDMPS7850B1Z1, have filed an application for Advance Ruling, under Section 97 of CGST Act, 2017 read with Rule 104 of CGST Rules, 2017 and Section 97 of KGST Act, 2017 read with Rule 104 of KGST Rules, 2017, in form GST ARA-01 discharging the fee of Rs. 5,000/- each under the CGST Act, KGST Act. 2. The applicant submitted that they are a proprietary concern, registered under the GST Act, engaged in the business of renting of residential dwelling, situated at #14, 2nd Cross, Thimmappa Reddy Layout, Bengaluru-560076, being the owne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r more friends/relatives who are familiar with each in study. If empty units available then from dual occupancy to occupancy can be opted by residents. c) Triple Occupancy : A unit in residential dwelling that contains three beds in a room for three persons, having facilities of electricity, food, furnishing, fan, lightings etc., Student who generally wish to study in a group will choose this option. 5.3 Applicant, while renting the dwelling, collects documents and details such as Name of the resident, College ID, Aadhar Card, Contact Number, address, Parent's details etc., 5.4 Applicant, being the owner of the property, pays property tax to the BBMP, under the category of residential building, which is suitable for residential purposes, the layout of the property, its structure, design is for usage as a residential unit and also the plan of the property sanctioned by the local authorities is for a residential building. 5.5 The following facilities are made available, as per para 8 of the 'Residential Service Agreement'. Cot with mattress, table with chair and cupboard with locking facility, one light and one fan per room and attached bathroom Break ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve or having lived of or relating to houses where people live rather than to places where they work. A residential area or building where people live Relating to homes rather than business Dwelling As per Cambridge English Dictionary A house or place to live in: As per Merriam Webster dictionary: 'A shelter (as a house) in which people live'. Residential Dwelling As per Black's Law Dictionary: 'Residential dwelling means living in a certain place permanently or for a considerable length of time'. As per the Oxford dictionary: 'A house or apartment or other places of residence or a place to live in or building or other places to live in'. Residence As per Black's Law Dictionary: 'Fixed and Permanent abode or dwelling place for the time being, as contradistinguished from a mere temporary locality of existence'. As per Merriam Webster dictionary: 'The act or fact of living or regularly staying at or in some place for the discharge of a duty or the enjoyment of a benefit'. As per the Cambridge dictionary: 'To go to live somewhere'. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2} 24 taxmann.com 134(ECJ) wherein it was held that Dwelling means a place where one lives, regarding and treating it as home. It is the place where he lives and to which he returns for sleep and which forms the Centre of his existence. Dwelling may be a house or part of a house and even a single room as a part of a house, may be a dwelling . 'Residential Dwelling' The GST law is silent about what should be the criteria to qualify the property as a Residential dwelling . In layman's language it is a place having requisite facilities to live for considerable period of time. Applicant submits that, there are no standard set of rules prescribed for determining, as to what constituents a residential dwelling . However, based on meanings and court decisions it can be understood whether the property is residential dwelling or commercial in nature; a. Layout of the property, its structure, whether it is designed for usage as a residential unit or a commercial unit. b. How is the plan of the property sanctioned by the local authorities. c. The intention of the developer / owner of the property. d. The purpose for which the dwelling is put ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontracts are structured, the privity of contract etc. to determine whether the premises is used as a residence or is merely an accommodation service. 6.4 Application to the facts of the case Applying the above principles to the present case the expression for use as residence used in exemption entry would mean that the rented residential dwelling is utilized by tenants for residing purposes. One of the pre-condition stipulated in the Resident Agreement is usage of residential dwelling for residence purposes and tenants in this case are students and women who are using the unit for staying only, hence, the other condition required for claiming exemption under SI. No. 12 of notification 12/2017 is satisfied. 6.5 Analysis of third essential requirements of entry 12 of notification 12/2017 CTR as under; (c) Recipient should be other than Registered Person; It is very much evident from the facts of the case that the tenants/users are Students and women who are individuals unregistered under GST Law and they are not required to be registered. 6.6 Analysis of fourth essential requirements of entry 12 of notification 12/2017 CTR as under; (d) Exempt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ification no. 11 /2017 CTR. Under taxable notification, following words Expressions are used Hotel Accommodation Unit of Accommodation Per unit Per Day Renting and premises 6.10 Whereas under exemption notification it is mentioned as renting of residential Dwelling , therefore, it is understood that, the expression renting of the residential dwelling has more weightage than the words or expressions as appearing in entry no. 7 of Notification No. 11/2017-Central Tax Rate. 6.11 In support of the above submissions, Applicant would like to place reliance on Hon hie Karnataka High Court in case of Taghar Vasudeva Ambrish v. Appellate Authority for Advance Ruling Karnataka [W.P. No. 14891 of 2020 (T-RES) dated February 07, 2022],( Refer Enclosure - 4) deciding on the similar issue it was held that, exemption can be claimed for renting / leasing of residential dwelling to the students and working women. Relying on the Hon'ble Supreme Court decision in the case of Kishore Chandra Singh v. Babu Ganesh Prasad Bhagat AIR 1954 SC 316, (Refer Enclosure - 5) Court held that, expression residence only connotes that a person eats, drinks an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 293,(Refer Enclosure - 8)Dt: 03.04.1957 at para 17 18 held that, 17 Section 35 of the Punjab Relief of Indebtedness Act, 1934 which amended Section 60( 1) of the Code of Civil Procedure appears to be to leave every debtor in possession of one residential house for his habitation though the Act was a measure which was designed in the main to relieve agricultural indebtedness in the Punjab on the lines of similar steps taken by Provincial Legislatures in other parts of India. The word residential and other cognate expressions such as, reside , 'residing , resident , residence residences and occupy occurring in several statutes have variously shaded but elastic meaning. A person is ordinarily said to reside where he lives with his family. The word residence connotes two elements, (1) actual or physical habitation and (2) the intention to remain there permanently that is, for an unlimited time. In its ordinary sense the word reside carries with it the idea of permanence, that is for any length of lime, as well as, continuity. The word residence denotes a dwelling house where a person lives in a settled abode. 18. In another sense, residential, house is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 14891 of 2020 (T-Res) held that such private hostels are covered under the category of residential dwellings and as such covered under exemption vide entry number 12 of the Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017. PERSONAL HEARING PROCEEDINGS HELD ON 06.09.2023 7. Sri. Sanjay M Dhariwal, Chartered Accountant 8s Authorised Representative of the applicant appeared for personal hearing proceedings and reiterated the facts narrated in their application. FINDINGS DISCUSSION 8. At the outset we would like to make it clear that the provisions of CGST Act, 2017 and the KGST Act, 2017 are in pari-materia and have the same provisions in like matters and differ from each other only on a few specific provisions. Therefore, unless a mention is particularly made to such dissimilar provisions, a reference to the CGST Act would also mean reference to the corresponding similar provisions in the KGST Act. 9. We have considered the submissions made by the applicant in their application for advance ruling. We also considered the issues involved on which advance ruling is sought by the applicant and relevant facts along with the arguments made by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2) (3) (4) (5) 12 Heading 9963 or Heading 9972 Services by way of renting of residential dwelling for use as residence [except where the residential dwelling is rented to a registered person]. [ Explanation . - For the purpose of exemption under this entry, this entry shall cover services by way of renting of residential dwelling to a registered person where, - (i) the registered person is proprietor of a proprietorship concern and rents the residential dwelling in his personal capacity for use as his own residence; and Heading 9963 or Heading 9972 (ii) such renting is on his own account and not that of the proprietorship concern.] NIL NIL 14 Heading 9963 Services by a hotel, inn, guest house, club or campsite, by whatever name called, for residential or lodging purposes, having declared tariff of a unit of accommodation below one thousand rupees per day or equivalent. NIL NIL Entry at SI.No. 14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rent and Unit have been defined by the applicant as under: Rent - Monthly charges payable for the unit of residential accommodation, including maintenance fees for the premises, reimbursement of electricity and other common area charges and any other fees charged to the resident. Unit - means a portion of room at the campus allocated by the RMfResident Manager) strictly for residential use and occupation by the resident, and includes any new area in the room allocated subsequently. Offer of accommodation - means a statement offering the resident accommodation in form of a habitable unit in the concerned campus of service provider issued to the resident. 16. From the above it is evident that the resident/inhabitants are offered a unit i.e a portion of a room with a cot on monthly rental basis. Further monthly rent also is charged and collected for the unit only but not for the residential dwelling. Thus the impugned accommodation being provided does not qualify to be a residential dwelling. Further it is seen that units are shared by one or more unrelated inhabitants. Applicant charges all the inhabitants of a room individually and not for a room as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch other time and may be informed to the residents from time to time by the RM. The premises will be locked in night, if any resident needs to be present outside of the premises, they may do so after obtaining prior consent of their parent, if applicable, and/or duly informing the RM.(Para 17) i) This is a shared accommodation and the resident is expected to share the unit with co-residents. It is the Residents individual responsibility to maintain his/her possessions securely in his/her Unit and the service provider or any of its officials, functionaries or staff including the RM shall not be held responsible under any circumstances for any loss or damage caused in this regard. (Para 20) j) The use of electric heaters, electric rods and other similar appliances are not entertained. Residents should take prior permission before using any appliances and pay appropriate cost. No resident is allowed to engage private help in the form of housemaids or keep pet animals in the premises, (para-21) 19. All the above terms and conditions of the RSA reveal that the impugned accommodation being provided by the applicant are akin to provision of unit of accommodation in a paid gu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sure or business or others. 996311 - Room or unit accommodation services This service code 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. In the instant case the applicant is providing accommodation services consisting of rooms or units, without kitchens with daily housekeeping services on a single or multi occupancy basis and thus merits classification under SAC 996311. Further the applicant is an establishment that provides the services that are akin to the services provided by Hotels, INN, Guest houses, Clubs other similar establishments. The rent being charged per person per unit per day is less than rupees seven thousand five hundred and thus the impugned services, covered under SAC 9963, attract GST @ 12%, in terms of entry number 7(i) of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017, as amended. 23. Now we proceed to consider the third question i.e. If applicant transaction is taxable, whether ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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