AAAR Confirms GST Applicability on Rent Received from Government Hostels
The present appeal (Order-in-Appeal No. AAAR/09/2025) has been filed by a company named M/s Navya Nuchu, Hyderabad, before the Telangana State Appellate Authority for Advance Ruling (Goods And Services Tax), 1st Floor, Commercial Taxes Complex, M.J. Road, Nampally, Hyderabad 500 001, under Section 100 (1) of the TGST Act, 2017 against Advance Ruling TSAAR Order No. 05/2024 dated 09.02.2024 passed by the Telangana State Authority for Advance Ruling – Order-in-Appeal passed – regarding Order of the AAAR in ref AAAR/08/2025 dated 20.2.2025, the Honourable High Court order W.P. No. 11954 of 2025 dated 28.04.2025, and the Personal Hearing held on 22.08.2025.
The initial appeal was filed by the company M/s. NavyaNuchu, Hyderabad, under Section 100 (1) of the Telangana Goods and Services Tax Act, 2017, against the Order No. 05/2024 dated 09.02.2024 (“impugned order”) passed by the Telangana State Authority for Advance Ruling. The company is registered under GST; hence, it possesses a GSTIN no. 36ACPPN2902H1ZJ. The Appellate Authority for Advance Ruling (AAAR), in its first decision, referenced the aforementioned appeal as barred by limitation, meaning the appeal was filed beyond the statutory deadline. The appellant, dissatisfied with the AAAR’s order, then approached the Honourable High Court, which has been pleased to pass orders in the ref 2nd cited above directing the AAAR to pass orders based on the merits of the appeal. Hence, now the appeal has been taken before AAAR, and another chance has been awarded to the appellant to present their side.
The appellant has filed an agreement with the Scheduled Castes Development Department, Hyderabad District, and Government Welfare Departmental Hostels, Government Social Welfare College Boys Hostel (Govt SWCBH) to put property on rent to run Social Welfare College (Boys Hostel).
The Scheduled Caste Development Department is involved in providing hostel facilities to students who belong to categories like Scheduled Caste (SC), weaker sections and backward classes. It has been argued that they are offering only services (and not goods) to the State Government. These services are related to functions that are assigned to a Municipality or Panchayat under Article 243W or 243G of the Indian Constitution. According to Entry 3 of Notification No. 12/2017 dated 28-06-2017, such services are exempt from GST. Therefore, they do not have to pay GST under the GST Act, 2017.
Questions asked by Appellant:
The appellant, M/s Navya Nuchu, had asked the following question seeking the Advance Ruling Authority via the impugned order:
- Question 1: Whether rent received from the Govt. SWCBH is taxable or not?
Answers Given by AAR:
The advance ruling gave the following answer to the aforementioned questions asked by the appellant:
- Answer: Yes, rent received from the Govt. SWCBH is taxable.
Dissatisfied with the above ruling, the appellant then approached the appellate authority on the ground that the Ruling of AAR is not justified in classifying their supply as “taxable”.
Final Order by AAAR:
The Telangana State Appellate Authority for Advance Ruling (AAAR) has dismissed the appeal filed by M/s Navya Nuchu and upheld the challenged ruling of the Advance Ruling Authority.
Refer to the official advance ruling for complete information.
Citation: M/s Navya Nuchu (AAAR Telangana); AAAR./04/2024; 11/09/2025
