2025-VIL-94-SC
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SGST Supreme Court Cases

GST - Exemption from GST on renting of residential property as hostel - The respondent co-owner leased out a residential property to a lessee, who in turn sub-let the property as hostel accommodation to students and working professionals - Eligibility to exemption under Entry 13 of Notification No. 9/2017-Integrated Tax (Rate) dated 28.06.2017 - High Court allowed assessee writ petition, holding that the exemption was available as the property was used as residential dwelling by the students and working professionals - Revenue in appeal - Whether the services provided by the respondent in the form of leasing of the residential premises as hostel to students and working professionals falls within the ambit of Entry 13 of the Notification No. 9/2017- Integrated Tax (Rate) dated 28.06.2017 and hence exempt from GST - HELD - The Entry 13 does not prescribe any condition that the lessee must itself use the property as residence for the exemption to apply. As long as the property is used as a residential dwelling, the exemption would be available, irrespective of whether the lessee or the sub-lessee uses it as residence - The Court relied on the dictionary meaning of 'residential dwelling' and judicial precedents to hold that hostel accommodation meant for long-term stay by students and working professionals would qualify as 'residential dwelling' for the purpose of the exemption - The exemption under Entry 13 is activity-specific and not person-specific. Therefore, the fact that the lessee was a company and not the end-users (students and working professionals) was irrelevant. The narrow interpretation of Entry 13 to exclude cases where the property is sub-let would defeat the legislative intent behind the exemption - The respondent is entitled to the exemption under Entry 13 of the Notification No. 9/2017- Integrated Tax (Rate) dated 28.06.2017 on the rental income received from leasing the residential property as hostel accommodation - The High Court order is upheld and the Revenue appeal is dismissed
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