Quick Summary
The Supreme Court of India, in a significant ruling for the real estate and student accommodation sector, has definitively held that the leasing of residential premises to an entity that subsequently uses it as a hostel for students and working professionals is exempt from GST. The bench, comprising Justices JB Pardiwala and KV Viswanathan, upheld a prior verdict of the Karnataka High Court, rejecting the contention that such transactions should attract GST. Legislative Intent Over Commercia
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FAQ :
The Supreme Court has affirmed that leasing residential premises to be used as hostels for students and working professionals is exempt from GST.
The court reasoned that the property's ultimate use remains residential, and imposing GST would increase costs for residents, defeating the legislative intent of the exemption.
Yes, the ruling provides clarity and relief to property owners and operators in the co-living and student housing sectors.
Previously, the Authority of Advance Ruling (AAR) and Appellate Authority for Advance Ruling (AAAR) in Karnataka had ruled that renting property as a 'hostel' was not covered by the residential accommodation exemption.
The decision ensures that the cost of residential accommodation for students and working professionals remains lower by retaining the benefit of the GST exemption.
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