The Karnataka Authority of Advance Ruling (AAR) ruled that the leasing of property for use as residence along with basic amenities, covered under accommodation services under GST.
The applicant, Bishops Weed Food Crafts Pvt. Ltd. is engaged in the business of provision of services by way of Leasing of residential units for use as residence to Tenants.
The applicant has sought the advance ruling on the issue whether leasing of property for use as residence along with basic amenities would qualify an composite supply under Section 2(30) of the Karnataka Goods and Services Tax Act, 2017.
The applicant has further asked that whether renting of property by Applicant is covered under entry 12 of the exemption Notification 12/2017 (Rate) dated June 28, 2017 3. If the answer to 2 is negative, whether services by the Applicant are covered under entry 14 of the exemption Notification 12/2017 (Rate) dated June 28, 2017.
Lastly, the applicant has sought advance ruling for the issue whether leasing of property for residential subletting would be covered under the exemption for residential dwelling via notification 12/2017 (Rate) dated June 28, 2017.
The coram of Dr.M.P.Ravi Prasad and Mashood Ur rehman Farooqui ruled that Leasing of property for use as residence along with basic amenities”, in the instant case, is covered under accommodation services, as ruled in the preceding paras, falls under SAC 996311 and hence would qualify as composite supply under Section 2(30) of the CGST/KGST Act, 2017.
“Renting of property by Applicant is not covered under entry 12 of Notification 12/2017-Central Tax (Rate) dated 28.06.2017, as their services are covered under accommodation services falling under SAC 996311,” the AAR said.
The Authority held that The exemption under entry 14 of Notification 12/2017-Central Tax (Rate) dated June 28, 2017 is available to the transaction of the applicant.
The AAR observed that leasing of property for residential subletting would not be covered under the exemption for residential dwelling under entry 12 Notification 12/2017-Central Tax (Rate) dated June 28, 2017, as the two are different and individual transactions.
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