Order Date – 29 November 2023

Facts –

• The Applicant, M/s Deepak Jain, is an un- registered applicant engaged in providing Professional service of Chartered Accountant and currently Senior Partner in B D Jain & Co. Chartered Accountants. 
• He owned a property and entered into lease agreement with Back Office IT Solutions Private Limited. As per the agreemant the demised premises shall be used solely for commercial purpose by the lessee i.e. for establishing the branch/office.

Issue –

• Whether the Demised premises will be covered in definition of residential dwelling for the purpose of notification No.05/2022-CentralTax (Rate) dated 13/07 /2022?

Order –

• The AAR observed that the definition of Residential dwelling is not mentioned in GST Law. However as per Black's Law Dictionary: 'Residential dwelling means living in a certain place permanently or for a considerable length. of time'.
• It was found that the property in question has been leased/rented for commercial use. So even if the use of said property has not been changed by JDA but since the so called residential dwellings does not remain as such as it being used for commercial purpose. 
• The said supply of service i.e. renting for commercial use is covered under 997212 and taxable @ 18% and the Applicant i.e. lessor is supposed to pay GST as mentioned above on forward charge basis. The lessee is not required to pay GST under RCM basis in term of Notification No.05/2022-Central Tax (Rate) dated 13.07.2022 effective from 18.07.2022.
• Hence it was ruled that the demised premises will not be covered in the definition of residential dwelling in term of Notification No.05/2022-CentralTax (Rate) dated 13/07 /2022as it being used for commercial use. The important factors to be included in the definition of Residential Dwelling is the purpose for which the dwelling is put to use and the length of stay intended by the users.