GST Exemption on Renting Residential Dwelling Denied for Commercial Use – AAR Gujarat

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  • Last Updated on 5 January, 2026

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GST exemption on renting residential dwelling

Case Details: Goldie Ashokbhai Shah, In re - [2025] 181 taxmann.com 430 (AAR - GUJARAT)

Judiciary and Counsel Details

  • Sushma Vora & Vishal Malani, Member
  • Atul Gupta, Authorised representative for the Applicant.

Facts of the Case

The applicant was one of the seven owners of a residential building. The applicant, along with the owners of the property, agreed to lease its residential building to a company that was not registered under the GST regime. The company will use the said property to further provide long-term residential accommodation to students and working professionals. The applicant sought a ruling on whether the service of renting a residential building to a non-registered person for use as residential accommodation for students and working professionals was exempt as per Entry No. 12 of the Exemption Notification.

AAR Held

The AAR, Gujarat ruled that the applicant was not eligible for exemption under Entry No. 12 of the Exemption Notification. Entry No. 12 of the Exemption Notification requires that the property rented must be a residential dwelling and must be given for use as a residence. The property in question was a commercial building, and the company intended to use it for providing accommodation to students and working professionals. This negated both conditions of the exemption entry. The exemption entry was amended to confine relief to personal residential use, not commercial accommodation businesses. The legislative intent was to exempt only those supplies of renting of immovable property that are used as residences in the personal capacity and are not used for commercial purposes, be it by a registered person or a non-registered person.

List of Cases Referred to

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied