Judgment dated 04 December 2025 – State of Karnataka vs. Taghar Vasudeva Ambrish
The Supreme Court has upheld that leasing a residential dwelling to an operator (such as a hostel/PG operator) qualifies for GST exemption under Entry 13 of Notification 9/2017, provided the end-use is residential. This applies for the period prior to 18 July 2022.
Key Findings:
1. The property qualifies as a ‘residential dwelling’.
2. All three exemption conditions are satisfied:
– Renting of property
– Property is a residential dwelling
– Used as a residence (even by sub-lessees)
3. Exemption is activity-based, not person-based.
4. Purposive interpretation adopted—tax should not burden students/working professionals.
5. Amendments of 18.07.2022 and 01.01.2023 are not retrospective.
Practical Impact:
– Exemption applies for 2019–2022 even when property is leased to a company that sub-lets to students or working professionals.
– Post 18.07.2022, exemption not available when rented to a registered person (except specific proprietor cases from 01.01.2023).
