GST on renting of residential dwelling for use as Hostel —- The petitioner having a residential property of 42 rooms have executed a lease deed for Hostel for providing long term accommodation to students and working professionals. The petitioner sought a clarification with regard to his eligibility to seek exemption on the rent received, filed an Advance Ruling application. The AAR Karnataka vide Advance Ruling dated 23.03.2020 held that renting of residential dwelling for use as a residence do not fall under Entry 13 of the Exemption Notification. Thereafter, the petitioner filed an appeal before the Appellate Authority for Advance Ruling, Karnataka, whereby the appeal was rejected. The counsel for the petitioner submitted that the expression 'residential dwelling' has not been defined anywhere in the Act. Therefore, its normal trade parlance meaning has to be taken into account. The court observed that the expression 'residence' and 'dwelling' have more or less the connotation in common parlance and therefore, no different meaning can be assigned to the expression 'residential dwelling' and it cannot be held that the same does not include hostel which used for residential purposes by students or working women.

Held that:- The Hon’ble High Court quashed the order dated 31.08.2020 passed by the AAAR Karnataka and held that the service provided by the petitioner by leasing out residential premises as hostel to students and working professionals is covered under Entry 13 of Notification No.9/2017 dated 28.09.2017.