The GST Authority for Advance Ruling (AAR), Maharashtra bench has held that the GST shall not be applicable on the lease income from the residential property.
Mr. Rajiv Magoo (Central Tax Member) and Mr. T R Ramnani (State Tax Member) was considering an application filed by M/s Kasturi & Sons Ltd, seeking a clarification that whether the applicant is eligible for the exemption from payment of GST on the monthly license fee to be received on the proposed leave and licensing of residential property.
The bench referred the decision in Larsen & Toubro Ltd, wherein it was held that the Applicant’s service is classifiable as rental or leasing service involving own/leased residential property (SAC 997211). It was also held that the applicability of SI No. 12 of the Exemption Notification depends upon whether the dwelling unit is used as residence. “It appears from the documents produced that all the above dwelling units are being used for residence, irrespective of whether they are let out to individuals or a commercial entity. Held that the Applicant’s service of renting/leasing out the dwelling units for residential purpose was, exempt under SI No. 12 of the Exemption Notification No. 12/2017-CT (Rate) dated 28.06.2017, as amended from time to time and the Applicant, therefore, was not liable to pay tax on supply of such service,” it held.
Referring the above decision, the AAR bench held that “the subject case is very similar to the case of leasing of property for residential use given to M/s Larsen & Toubro by Ws Borbheta Estate Pvt Ltd mentioned above and therefore the ratio of the above mentioned order is applicable in the subject case also.”
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