Hostel qualifies as residential dwelling, use of property as residence by lessee itself, not a qualifying condition for GST exemption – Supreme Court

In brief

In a recent judgment¹, the Supreme Court has upheld the Karnataka High Court’s judgment granting GST exemption on rent received from leasing residential premises as hostels to students and working professionals. The court held that such leasing qualifies as ‘services by way of renting of residential dwelling for use as residence’ under Entry 13 of Notification No. 9/2017-Integrated Tax (Rate) dated 28 June 2017 (Entry 13). This decision clarifies that the exemption applies even if the lessee is a company sub-leasing the premises as hostels to students or working professionals, provided the ultimate use is residential.