The Delhi High Court has held that residential leases used exclusively for residence are exempt from Goods and service Tax (GST).
The bench of Justice Sachin Datta set aside an order passed by the Collector of Stamps directing payment of additional stamp duty and penalty on a residential lease deed, holding that the authorities wrongly included Goods and Services Tax (GST) while computing stamp duty.
The petitioner, Gurdev Raj Kumar executed a lease deed dated July 1, 2020, clearly specifying that the property was to be used solely for residential purposes. While presenting the document for registration before the Sub-Registrar, the deed was impounded on the grounds of alleged deficient stamp duty, with authorities contending that GST was applicable and should have been factored into the rent for stamp duty computation.
Following this, the Collector of Stamps issued an order on October 19, 2020, demanding, Deficient stamp duty: ₹51,740; Penalty: ₹2,06,960; and Total amount: ₹2,58,700.
The petitioner deposited the amount under protest to allow registration of the lease.
The High Court examined Entry No. 12 of Notification No. 12/2017-Central Tax (Rate) which exempts renting of residential property for use as residence from GST. The Court noted that the exemption applies irrespective of whether the tenant is an individual or a corporate entity, as long as the use is residential.
The Court also referred to a 2018 clarification issued by the Department of Revenue, reiterating that tenancy rights for residential use are fully exempt from GST.
The Court further relied on a Tamil Nadu Inspector General of Registration Circular (2019), which clarifies that GST, even where applicable, cannot be included as part of the rent for calculating stamp duty since GST is not a charge on the property itself.
The bench held, “Renting of a residential dwelling for use as residence is exempt from GST. As such, the view adopted by the respondent as regards deficit payment of stamp duty is misconceived.”
The Court quashed the order and directed the Collector of Stamps to refund Rs. 2,58,700 paid by the petitioner within six weeks.
Case Details
Case Title: Mr. Gurdev Raj Kumar Vs Collector Of Stamps
Case No.: W.P.(C) 1463/2021
Date: 28.10.2025
Counsel For Petitioner: Amish Tandon
Counsel For Respondent: Lalltaksh Joshi