New Delhi: The Supreme Court on Thursday ruled that leasing residential premises to an entity that uses it as a hostel for students and working professionals is exempt from Goods and Services Tax (GST).

A bench comprising Justices JB Pardiwala and KV Viswanathan upheld the Karnataka High Court’s verdict, which stated that such leasing falls under GST exemption.

"In the case on hand, the ultimate use of the property as residence remains unchanged. However, if 18 per cent GST is levied on this transaction between the respondent No. 1 and the lessee i.e. M/s DTwelve Spaces Private Limited, the same would ultimately be passed on to the students and working professionals which would lead to a situation where the legislative intent behind granting exemption for residential use is defeated," th

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