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2020 (1) TMI 1509 - AUTHORITY FOR ADVANCE RULING, RAJASTHANClassification of services - composite supply - bundled supply of services or not - principal supply is of rent of hostel accommodation - hostel accommodation along with food facility to the students wherein consolidated amount is charged from the students - exemption from GST under Sr. No. 14 of the CGST (Rate) Notification No. 12/2017 dated 28.06.2017 as amended if the charges per day is less than ₹ 1000/- - taxability on supply of hostel accommodation along with food facility - rate of GST. HELD THAT:- The services supplied are more than two and taxable under GST Act, 2017 and are supplied in ordinary course of business by the applicant - Bundling/ Naturally bundled has not been defined in GST law, hence, reference can be taken from CBEC Education Guide issued in 2012 after introduction of negative list in erstwhile Service Tax regime when concept of bundling was introduced for the first time. It is found that naturally bundled services are those services wherein one of the services is the main service and the other services combined with such service are in the nature of incidental or ancillary services which help in better enjoyment of a main service - If current nature of supply of services is tested based on above factors, it can be ascertained that the provision of hostel accommodation could be a principal supply but ancillary services like food, gym, housekeeping, play room, cannot be said to arise naturally with the principal service of hostel accommodation and therefore are not bundled naturally with principal supply - the ancillary services like gym, housekeeping, play room, TV in dinning hall are not naturally bundled with principal supply of accommodation service and therefore as per definition of Composite Supply discussed above, the supply by the applicant is not a composite supply. Service of serving of food to students in hostel - HELD THAT:- The applicant is providing service of serving of food to students in hostel. The said service is classifiable under HSN 996333 as provided under Annexure to Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 and attracts GST @ 5% as defined under Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 (as amended). Providing “playroom” services to students residing in hostel - HELD THAT:- The said service is a kind of sporting/recreational service classifiable under HSN 999652 as provided under Annexure to Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 and attracts GST @ 18% as defined under Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017. Housekeeping and room cleaning services to students residing in hostel - HELD THAT:- The said service is classifiable under HSN 998533 as provided under Annexure to Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 and attracts GST @ 18% as defined under Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017. The highest rate of GST is 18% amongst various services provided by the applicant to students in hostel. As the services supplied by the applicant is a Mixed Supply and will attract GST @ 18%. Exemption from GST - HELD THAT:- Hon'ble West Bengal Authority for Advance Ruling under GST in the matter of IN RE: M/S. SARJ EDUCATIONAL CENTRE [2019 (2) TMI 1605 - AUTHORITY FOR ADVANCE RULING, WEST BENGAL] on the similar issue viz. whether lodging along with food to the students by a private boarding house is a composite supply and eligible for exemption under Sl. No. 14 of Notification No. 12/2017-CT(Rate) dated 28.06.2017 it was held that Sl. No. 66 of the Exemption Notification is applicable to the services provided by or to an educational institution, as defined under clause 2(y) of the said notification. The Applicant is not an educational institution within the meaning of the above clause. Although the services are provided in terms of an MOU with St Michael’s School, the Applicant charges the consideration on the individual students. Being liable to pay the consideration, such students are, therefore recipients of the Applicant’s services and not the educational institution. Sl. No. 66 of the Exemption Notification is, therefore, not applicable Thus, the entire charges recovered from the students is not exempted from GST under Sr. No. 14 of the GST (Rate) Notification No. 12/2017 dated 28.06.2017 (as amended).
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