Supreme Court Clarifies GST Exemption on Hostel/PG Rentals
The Supreme Court has delivered a landmark ruling on GST applicability for residential properties leased to aggregators providing hostel/PG accommodation.
Let us have a Short Overview of the Case of tate of Karnataka vs Taghar Vasudeva Ambrish (2025)
Key Highlight:
Leasing a residential dwelling to an aggregator (like a hostel/PG operator) continues to qualify as “renting of residential dwelling for use as residence” for the pre–18 July 2022 period – even if the lessee does not personally stay there.
The Court emphasised that the ultimate residential use-by students, working professionals, etc.-is what determines exemption under Entry 13 of Notification 9/2017. Imposing 18% GST at the first stage would burden the end-users and defeat the very purpose of granting exemption for residential use.
Final Outcome:
No GST payable on such rentals for 2019–2022. The 2022 amendment restricting exemption for rentals to registered persons cannot be applied retrospectively.
The copy of the order is as under:
