Page 78 - GSTL_20th August 2020_Vol 39_Part 3

292 GST LAW TIMES [ Vol. 39
applicant for the purpose of long stay accommodation. For this, the applicant
presented sample sub-lease agreement as Exhibit-3.
The Exhibit-3 presented by the applicant is examined. It is a “Residents
Enrollment Form” but not a sub-lease agreement as claimed by the applicant.
Apart from the resident’s personal details, there are columns like Food prefer-
ence, Optional Service Price etc., are being collected in the enrolment form. With
regard to the “Rules and Regulations” attached to the Resident Enrollment Form,
apart from others there are conditions like “Rents will be calculated according to
your rent ledger”, “Premium dishes will be limit” etc.
Further, it is examined from the agreement between the Lessor and Les-
see (Exhibit-2), there are 73 rooms in the building with all amenities like exhaust
fans, geysers, lights and fittings, curtain rods, sanitary fittings, etc., provided by
the Lessor.
Reading the lease agreement (Exhibit-2) and “Residents Enrolment
Form” (Exhibit-3) together and also taking note of the various observations made
above, it appears that apart from renting of the rooms, the inmates are also being
provided with food and hospitality services. As verified from the records, the
lessee is a registered Taxable Person.
Though the applicant claims that she has rented out residential dwelling
for use as residence, it appears that the premise is a non-residential property.
Considering the number of rooms and amenities provided in it, boarding and
hospitality services extended to the inmates and all the clauses of the agreements
discussed above, it appears that the building was constructed for the purpose of
running a lodge house. It is clear that the lessee is engaged in commercial activity
of renting of rooms in the dwelling and providing boarding and hospitality ser-
vices to the inmates.
Therefore, it is clear that the lessor has rented out her dwelling for com-
mercial activity, and supply of such services, in the facts and circumstances of
the case, are classifiable as “Rental or leasing services involving own or leased
non-residential property ” under Service Code (Tariff) 9972 12. It is taxable in the
hands of the lessor and is liable for IGST at the rate of 18 per cent.
RULING
Query : Whether the applicant is eligible for the exemption from
payment of GST on the monthly rentals received by her on
lease of her residential building at Telangana to D-Twelve
Spaces Private Limited, as per Sl. No. 13 of the Notification
No. 9/2017, dated 28-6-2017.
Answer : (1) The classification of service provided by M/s. Lakshmi
Tulasi Quality Fuels, is covered under SAC 9972 12 and hence
under Entry No. 16 of Notification No. 8/2017-Integrated Tax
(Rate), dated 28-6-2017, liable to IGST @ 18%.
(2) The Entry No. 13 of Notification No. 9/2017-Integrated
Tax (Rate), dated 28-6-2017 - “services by way of renting of
residential dwelling for use as residence” is not applicable to
the present case on hand.

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GST LAW TIMES  20th August 2020  78