Levy of GST— The present appeal has been filed against the Advance Ruling issued by Authority for Advance Ruling, Andhra Pradesh.

The appellant,-M/s. Aluri krishna prasad, in the present appeal filed against the ruling given by the Hon'ble Advance Ruling Authority, Andhra Pradesh holding that rental amounts collected by the appellant from the lessee who had used the said buildings for providing accommodation to students 1s liable to GST though the said buildings were used for residence, denying exemption provided under Notification No. 12/2017-CT (Rate) dt:20.06.2017 as amended against the settled legal position.

The appellant owns certain residential buildings at Vijayawada and he leased them to certain educational institutions/ societies for the purpose of accommodation of their students. Copies of the lease agreements were submitted. As per the agreements entered with clients, the appellant receives monthly rental amounts from the lessees. The buildings given on rent are constructed with small rooms to suit for accommodation of students.

Question raised for advance ruling authority—

(i) The amount received for leasing residential hostel rooms is exempt under si. No.14 (Heading 9963) of Notification no 12/2017-Central Tax (Rate) dt:28.06.2017 as amended?

(ii) The amount received for leasing residential hostel rooms is exempt under si. No.12 (Heading 9963) of Notification no 12/2017-Central Tax (Rate) dt:28.06.2017 as amended?

The Hon'ble ARA gave its ruling that the appellant is not eligible for exemption from GST for the following reasons:-

a) The agreement between the appellant and the lessee is on built up area basis and not on the basis of unit cost of accommodation and hence, it cannot be treated as given for residential dwelling.

b) The appellant is not extending accommodation to the students but to the lessee to whom the building is given on rent is providing accommodation to the students.

Ground of appeal is that the lower authority erred in giving a finding that since the building is given on rent to the educational institutions/ society on the basis of area and not on the basis of the amount per month etc. he cannot claim the benefit of exemption from GST under the said notification. The lower authority failed to appreciate the fact that the purpose for which the building is given on rent is for dwelling as residence and it is immaterial how the amount is collected and from whom.

If there is a conditional exemption in GST based on end-use, the end-use has to be determined with respect to facts and for the recipient of the services only from the supplier directly and it is not for the department to see how the services are finally put to use by the recipient in turn and so on. In the instant case there is no evidence to show that either the building was a residential dwelling or it is going to be put to use as residence for himself by the lessee as discussed in detail above. The lower authority has considered all the facts and details of the case and examined them in the light of the relevant provisions of the APGST Act and Rules 2017 along with relevant notifications while deciding the case.

Held that—This authority confirm and uphold the ruling given by the Advance Ruling Authority of Andhra Pradesh in this case.