The Maharashtra Authority for Advance Rulings (AAR) has made it clear that GST would not be applicable to rent or lease or license fee of residential flats let out to commercial establishments. In cities like Mumbai, residential flats are let out for a consideration of rent or lease or license amount for use by commercial establishments as quarters to their employees.
In fact, there is no GST on rental income. But, commercial establishments taking the flats on lease is creating problems. In this backdrop, divergent views are expressed on the applicability of the GST to the rental income. Some say that the income attracts the GST, while others negate it. To get clarification, Kasturi and Sons which let out flats to the LIC approved the AAR in this regard. The Bench heard both sides and ruled that the rent would not come under the GST limits as the flats are being used as residential quarters by the LIC.
