Renting Residential Dwelling to Educational Body Not Taxable Under GST

Case Details: Bhandary Gas Agency vs. Joint Commissioner of Commercial Taxes, DGSTO, SHIVAMOGGA - [2026] 184 taxmann.com 146 (Karnataka)

Judiciary and Counsel Details

S.R. Krishna Kumar, J.
Smt. Krishika Vaishnav & A. Mahesh Chowdhary, Advs. for the Petitioner.
K. Hema Kumar, AGA for the Respondent.

Facts of the Case

The petitioner had leased a residential property to an educational foundation for use as accommodation for students, staff and teachers. It had paid GST on the rent received and subsequently claimed refund on the ground that the transaction was exempt under Entry 13 of ‘Notification No. 9/2017-Integrated Tax (Rate), dated 28-06-2017,’ which provides exemption for renting of residential dwelling for use as residence. During audit proceedings, the exemption was initially accepted; however, it was subsequently reversed and the refund claim was denied. The Petitioner’s objections and appeal were rejected, leading to the filing of a writ petition before the High Court.

High Court Held

The High Court held that Entry 13 of Notification No. 9/2017-Integrated Tax (Rate), dated 28-06-2017, issued under Section 6 of the IGST Act, exempts the renting of residential dwelling when used as residence. The Court observed that the term ‘residential dwelling’ refers to residential accommodation and is distinct from commercial establishments such as hotels. It further held that the use of such premises as hostel accommodation for students, staff or teachers constitutes residential use. Accordingly, leasing such residential premises was not exigible to GST and the impugned order denying refund was set aside.