GST Exemption available of service of Renting of immovable properties to Social Justice Department: AAAR

The Appellate Authority for Advance Ruling (AAAR) setting aside the Order of The Authority for Advance Ruling (AAR) said that the services of renting out immovable properties provided by the Appellant to the Social Justice Department of the Government of Maharashtra will be exempt from the levy of GST in terms of SL. No. 3 of Notification No. 12/2017-C.T. (Rate) dated 28.06.2017.

Accordingly, since service is Exempt, the TDS provisions made under section 51 of the CGST Act, 2017, will not be applicable therein.

“The Applicant has submitted that the Samaj Kalyan Vibhag of the Government of Maharashtra has taken the immovable property on rent from the applicant to house the girls from the backward class communities which can be considered a welfare measure was undertaken by the Government for the under-privileged section of the society. Other than making this statement, the applicant has not submitted any evidence or submissions to state how his activities are covered under Article 243G/243W of the Constitution. There are no submissions made to show that the impugned services are supplied by the applicant by way of any activity in relation to any functions entrusted to a Panchayat under article 243G of the Constitution or in relation to any function entrusted to a Municipality under article 243ofthe Constitution.”

This ruling was in line with the view expressed by AAR Karnataka in the case of Sri Puttahalagaiah G.H. [Advance Ruling No. KAR/ ADRG/ 19/2021 dated 06.04.2021] wherein the Authority has ruled that “the applicant has rented his property to Backward Classes Welfare Department, Government of Karnataka, who in turn using the same for providing hostel facilities to the post metric girls of backward classes. This is in relation to the function entrusted to a panchayat under article 243G of the Constitution which is covered by the 27th Entry of the 11th schedule which says “Welfare of weaker sections, and in particular, of scheduled castes and the scheduled tribes.”

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