The Authority of Advance Ruling (AAR), Andhara Pradesh, has held that all kinds of rent of accommodations for the use of commercial purposes will attract a GST (Goods and Services Tax) at the rate of 18% and such transactions will be covered under the “Rental or leasing services involving own or leased non-residential property” head.
The ruling was provided by the AAR in amid the issue raised by the applicant M/s Lakshmi Tulasi Quality Fuel, who is engaged in the business of operating, running and managing the day-to-day operations and sub-lease of the residential establishments to the businessmen for the purpose of long-stay accommodation. The applicant sought the ruling of the AAR on the issue that whether the applicant will enjoy an exemption from GST, under Sl.No. 13 of the Notification No.9/2017 dated June 28, 2017, for the receipt of monthly payments against the lease of her residential premises to D-Twelve Spaces Private Limited
The bench of AAR, with D. Ramesh and M. Shreekanth as the members, held that the applicant will not be exempt from GST under Sl.No. 13 of the Notification No.9/2017 dated June 28, 2017, and will have to pay the GST at the rate of 18% 
“The entry No.13 of Notification No.9/2017 (Integrated Tax) (Rate) dated June 28, 2017, services by way of renting of residential dwelling for use as a residence’ is not applicable to the present case on hand. Though the applicant claims that she has rented out a residential dwelling for use as a residence, it appears that the premise is a non-residential property. Considering the number of rooms and amenities provided in it, boarding and hospitality services extended to the inmates, and all the clauses of the agreements discussed- above, it appears that the building was constructed for the purpose of running a lodging house. It is clear that the lessee is engaged in the commercial activity of renting rooms in the dwelling and providing boarding and hospitality services to the inmates,” the AAR said.
