Order Date – 22 March 2024

Parties: Thai Mookambikaa Ladies Hostel Vs Union of India, Tamil Nadu State Appellate Authority for Advance Ruling and The Joint Commissioner of GST (State Tax)

Facts –

• The Petitioner, Thai Mookambikaa Ladies Hostel, are running private ladies hostels by providing residential accommodation and food to the college students and working women on monthly basis with reasonable tariffs per student or per inmate ranges between Rs.1200/- to 6,500/- per month.
• The petitioner submitted that since they are providing the residential accommodation to the girl students and working women, which can be termed as 'residential dwelling the charges/rent/tariff collected by them from the inmates on such accommodation, qualifies for GST exemption and therefore, they are entitled to the exemption from levy of GST tax.

Issue –

• Whether the petitioner qualifies for GST exemption under Entry 12 of Exemption Notification No. 12/2017-Central Tax (Rate)?

Order –

• The Single Bench of Hon’ble High Court observed that the inmates of the respective hostels run by the petitioners are the girl students and the working women who are not registered persons and using the premises as their residence, for which, they are paying fee, which can be termed as rent and it is not the case of the respondents that the inmates are carrying on any commercial activities in the rented premises or using the same for commercial purpose. 
• That apart, the inmates of the room also using the common kitchen and sharing the foods as their own. Admittedly, GST is not applicable if a residential property is rented out to any persons in their personal capacity and for use as their own residence. In other words, if a residential property is rented out, that too for residential purpose, then the rental income derived from such property does not attract GST.
• Thus, the word “residential dwelling” referred in Entry No.12 of the Exemption Notification No.12 of 2017 would include the hostel facilities provided by the petitioners to the working women, students, professional, etc. For the working women and professionals also, the said hostel room is residential dwelling unit for them.
• It is clear that the renting out the hostel rooms to the girl students and working women by the petitioners is exclusively for residential purpose, the Court is of the considered view that the condition prescribed in the Notification in order to claim exemption, viz., 'residential dwelling for use as residence' has been fulfilled by the petitioners and thus the said services are covered under Entry Nos.12 and 14 of the Notification No. 12/2017-Central Tax (Rate) dated June 28, 2017, the petitioners are entitled to be exempted from levy of GST.