The West Bengal Authority for Advance Ruling (WBAAR) has held that “service apartments” developed by SRIPSK Developers LLP under the project Palladina at Matheswartola Road, Kolkata, shall be treated as commercial buildings, not residential and 12% Goods and Services Tax (GST) is payable.
The bench of Shafeeq S. and Jaydip Kumar Chakrabarti has observed that “Palladina” cannot be treated as a residential project merely because WBRERA’s online system does not allow “service apartment” registration. The nature and purpose of the project, along with the competent authority’s classification, clearly indicate its commercial character.
The applicant, SRIPSK Developers LLP, is constructing a B+G+31 storey service apartment building along with a hotel and multi-level car parking complex on land originally owned by Park Leather Company. The project is developed under a 2024 Development Agreement with landowners PS Group Realty Ltd & Others.
The land, measuring around 10 bighas and 4 cottahs, was sold in 2013 under a conveyance deed that restricted its use exclusively to commercial purposes, such as a hotel-cum-convention centre and other commercial enterprises, explicitly excluding residential units.
However, while the Kolkata Municipal Corporation (KMC) sanctioned the building plan specifically for “Service Apartments”, the West Bengal Real Estate Regulatory Authority (WBRERA) issued project registration as a “Residential Project”—since its portal had no classification option for service apartments.
This conflicting treatment led the developer to seek an advance ruling to determine the correct GST classification and applicable rate.
The applicant argued that service apartments differ from typical residential units because they can be rented for both short-term and long-term stays and are equipped with hotel-like amenities, such as housekeeping and concierge services.
Citing Notification No. 11/2017-Central Tax (Rate) and Notification No. 03/2019-Central Tax (Rate), the applicant pointed out that residential constructions attract 5% GST (without ITC) and Commercial constructions attract 12% GST (with ITC).
The firm maintained that despite WBRERA listing it as residential, the land-use restriction and KMC sanction clearly designate the project as a commercial venture, and it should therefore be taxed at 12% GST.
The Authority noted that the KMC, being a “competent authority” under Section 2(p) of the RERA Act, has explicit jurisdiction over land development and building sanctions. The KMC sanction plan (BP No. 2024070124 dated 20.12.2024) expressly identifies the building as “Service Apartments”. The land deed restriction prohibits residential use and mandates commercial purposes only.
The Authority held that “Palladina” cannot be treated as a residential project merely because WBRERA’s online system does not allow “service apartment” registration. The nature and purpose of the project, along with the competent authority’s classification, clearly indicate its commercial character.
Ruling Details
Applicant’s Name: Ms. SRIPSK Developers LLP
Ruling Date: 17-10-2025
 has held that “service apartments” developed by SRIPSK Developers LLP under the project Palladina at Matheswartola Road, Kolkata, shall be treated as commercial buildings, not residential and 12% Goods and Services Tax (GST) is payable.){kind=link}