Renting of residential dwelling by registered proprietor in his personal capacity is exempt under GST: Delhi HC

Case Details: Seema Gupta v. Union of India - [2022] 142 taxmann.com 564 (Delhi)

Judiciary and Counsel Details

• • Manmohan & Ms Manmeet Pritam Singh Arora, JJ.
  • Ms Nidhi Gupta, Adv. for the Petitioner.
  • Yash Aggarwal, Sumit K. Batra, Manish Khurana, Kshitij Chhabra, Akshay Amirtanshu, Sr. Standing Counsel, Ashutosh Jain & Pratik Samajpati, Advs. for the Respondent.

Facts of the Case

The writ petition is filed before the Delhi High Court challenging the amendment in the exemption Notification whereby the exemption which was earlier granted for renting of residential accommodation is no longer available to the GST registered tenants.

The petitioner challenged the relevant entry of Notification No. 04/2022-Central Tax (Rate), dated 13-07-2022 being ultra vires Article 14 of the Constitution of India.

High Court Held

The High Court held that where the residential dwelling is rented by the proprietor of a proprietorship firm in his personal capacity for use as his own residential dwelling and such renting is not on the account of his business but is rented on his personal account, then the exemption would continue to be available.

Further, it was also held that where the residential dwelling is rented by a partner of a partnership firm in his personal capacity for his own residential use and not accounted for in the accounts of the partnership firm, the exemption would be available.

Similar position would be valid in the case of other forms of businesses.