SC: Hostels for Students, Professionals in Residential Buildings Exempt From GST
The ruling came on a plea filed by a Bengaluru property co-owner who had leased a 42-room residential building to M/s D Twelve Spaces Pvt. Ltd
NEW DELHI: The Supreme Court on Thursday ruled that leasing residential premises to an entity that uses them as hostels for students and working professionals is exempt from GST. A Bench of Justices J.B. Pardiwala and K.V. Viswanathan upheld the Karnataka High Court’s decision, which had granted GST exemption in such cases.
The court said the ultimate use of the property “as residence” remains unchanged, and imposing 18 per cent GST would only burden students and working professionals, defeating the legislative intent behind exempting residential use.
The ruling came on a plea filed by a Bengaluru property co-owner who had leased a 42-room residential building to M/s D Twelve Spaces Pvt. Ltd., which in turn rented it out as long-term hostel accommodation. Earlier, both the Karnataka AAR and AAAR had denied GST exemption, holding that a hostel could not be treated as residential accommodation. The High Court set aside that view, and the Supreme Court has now affirmed it.
