TMI Blog2021 (1) TMI 691X X X X Extracts X X X X X X X X Extracts X X X X ..... everse Charge mechanism - whether extra bed forms part of the room tariff and liable to be charged as per various rates as per slabs given under Notification No. 11/2017-Central Tax (Rate), No. 13/2018-Central Tax (Rate) Dated 26th July 2018 and 20/2019 -Central Tax (Rate) Dated 30th September 2019? Whether catering of food, banquet facilities and combination of both (as per requirement of the customer) in self owned marriage and party halls by Hotel Jewels (having all rooms below ₹ 7,500/1, Kunjpura Road, Karnal (A unit of Jewel Classic Hotels Pvt Ltd) is covered in Outdoor Catering taxable @ 5 % as per Notification No. 20/2019 Dated 30th September 2019? - HELD THAT:- The hotel Jewels is the principal place of business and Noor Mahal is the additional place of business and both are owned by the same owner i.e. M/s Hotel Jewel Classic Pvt. Ltd. under the same registration number - There is a condition in column 3 of (i)(a)(iv) in the Notification No. 20/2019 Central Tax (Rate) dated 30.09.2019 amending the serial No. 7 of Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017, that the supply of outdoor catering should not be provided by such suppliers who are pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der section 9(4) is not applicable on the applicant. Whether the extra bed forms part of the room tariff and liable to be charged as per various rates prescribed as per slabs given under Notification No. 11/2017-Central Tax (Rate), No. 13/2018-Central Tax (Rate) Dated 26th July 2018 and 20/2019 -Central Tax (Rate) Dated 30th September 2019? - HELD THAT:- The charges of extra bedding if exceeds the room tariff as per the N/N. 20/2019-Central Tax (Rate) dated 30th September 2019 amending Notification No. 11/2017 - Central Tax (Rate) dated 28.06.2017, the same shall be treated as gross value of supply and the tax shall be charged as per the amount including the extra bedding charges as it is a part of room tariff. - HAR/HAAR/R/2019-20/23 - - - Dated:- 25-6-2020 - SANGEETA KARMAKAR AND MADHUNALA, MEMBER Present for the Applicant : Sh. Bhuvan Mittal (C.A) and Sh. Manoj Mittal (Advocate) 1. Brief submission of the applicant: 1.1 The applicant is running three separate units at three separate locations, having separate management in following names:- a. Hotel Jewels: Hotel Jewels has the facility of short-term hotel accommodation with 54 rooms all with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Central Goods and Services Tax (Amendment) Act, 2018 read as follows:- 9 (4). The central tax in respect of the supply of taxable goods or services or both by a supplier, who is not registered, to a registered person shall be paid by such person on reverse charge basis as the recipient and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both. 1.5.1 However, with a view to provide relief to registered persons, the Central Government issued Notification No. 8/2017 Central Tax (Rate) dated 28th June 2017, which exempted, w.e.f. 1st July, 2017, the intra-state supply of goods or services or both received by a registered supplier from whole of CGST, provided that the exemption would not be applicable where the aggregate value of such supplies of goods or service or both received by a registered person from any or all the suppliers, who is/or are not registered, exceeds five thousand rupees in a day. 1.5.2 In view of difficulties faced by registered persons in complying with above provisions, the Proviso to above Notification No. 8/2017 CT (Rate) dated 28th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eful reading of newly substituted sub section 4 will show that provisions of reverse charge under this sub section would be made applicable to a Specified Class of Registered Persons in respect of supply of specified categories of goods or services or both received from an Unregistered Supplier . 1.6.4 Further it is submitted that Section 9 (4) is applicable on the recipient of goods or services or both but in case of the applicant, he is neither supplier of the additional services nor is the recipient of the services, he is merely a pure agent arranging those supplies on behalf of the client. Thus, provisions of Section 9 (4) are not applicable on us. 1.7 The applicant in its both Hotels provides short term accommodation services, in which sometime customer states that there will be three occupants in a single room. There are two methods of charging for three person s occupancy: Particulars Amount Hotel Room (Three Occupancy) 6000.00 OR Particulars Amount Hotel Room 5000.00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... low: In the said notification- (I) In the table,- (a) Against serial number 7, for the entries relating thereto in column (3), (4) and (5), the following items and entries shall be substituted namely,- (3) (4) (5) (iv) Supply of outdoor catering, at premises other than specified premises provided by any person other than- (a) Suppliers providing hotel accommodation at specified premises, or (b) Suppliers located in specified premises 2.5 Provided that credit of input tax charged on goods services used in supplying the service has not been taken [refer Explanation (iv)] (v) Composite supply of outdoor catering together with renting of premises (including hotel, convention centre, club, pandal. shamiana or any other place, specially arranged for organising a function) at premises other specified premises provided by any person other than- (a) suppliers providing hotel accommodation at specified premises or (b) suppliers located in specified premises 2.5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (xxxvi) Specified premises means premises providing hotel accommodation services having declared tariff of any unit of accommodation above seven thousand five hundred rupees per unit per day or equivalent. Question No. 1 3.2 The applicant contended that Hotel Jewels supplies food/beverages at its own marriage and party halls and these parties, conferences, functions carried out by Hotel Jewels are event based and occasional in nature. Further, the definition of outdoor catering does not distinguish whether the food/beverages are supplied in its own premises or other person s premises. Hence, the applicant falls under the definition of outdoor catering . Further in the premises of Hotel Jewels, there is no unit of accommodation above Rupees seven thousand five hundred rupees per unit per day, thus, as per the applicant; Hotel Jewels is eligible for charging GST @ 5% for its catering of food with or without renting of premises in its marriage and party halls. 3.3 Here, we differ with the applicant, because the Hotel Jewels and Noor Mahal are not distinct persons. The hotel Jewels is the principal place of business and Noor Mahal is the additional place of busin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... axpayer is not entitled to supply @ 5% from the business premises of Hotel Noor Mahal/Hazuri Bagh. Question No. 3 3.9 Further, the applicant contends that they are satisfying the conditions of pure agent given under Rule 33 of CGST Rules. Rule 33 of CGST Rules, 2017 is reproduced as below:- Rule 33: Value of supply of services in case of pure agent Notwithstanding anything contained in the provisions of this Chapter, the expenditure or costs incurred by a supplier as a pure agent of the recipient of supply shall be excluded from the value of supply, if all the following conditions are satisfied, namely, (i) the supplier acts as a pure agent of the recipient of the supply, when he makes the payment to the third party on authorisation by such recipient; (ii) the payment made by the pure agent on behalf of the recipient of supply has been separately indicated in the invoice issued by the pure agent to the recipient of service; and the supplies procured by the pure agent from the third party as a pure agent of the recipient of supply are in addition to the services he supplies on his own account. Explanation : - For the purposes of this rule, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt are being exclusively enjoyed by the customers at applicant premises. The applicants only arrange those services on behalf of the customer. In addition to these services, the applicant always supplies its own services either renting of its premises or supply of food or both. Further, the applicant contended that they satisfy all the four conditions given in definition of pure agent The conditions and their fulfilment by them are as under:- (a) enters into a contractual agreement with the recipient of supply to act as his pure agent to incur expenditure or costs in the course of supply of goods or services or both; The applicant arranges flower decoration, DJ, electronic items, food from specific vendors etc. as per requirement given by the customers. The written agreement (Either on paper or email) with the recipient of services exists before making the bookings. (b) neither intends to hold nor holds any title to the goods or services or both so procured or supplied as pure agent of the recipient of supply; All the arrangements/bookings are always made in the name of recip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ified by the government. Till date the following notifications have been issued under new Section 9(4):- (i) Notification No. 07/2019-Central Tax (Rate) dated 29.03.2019; and (ii) Notification No. 24/2019-Central Tax (Rate) dated 30.09.2019; By perusal of the above notifications it is clear that presently reverse charge mechanism under section 9(4) is not applicable on the applicant. Question No. 4 3.16 Now, to determine whether the extra bed forms part of the room tariff and liable to be charged as per various rates prescribed as per slabs given under Notification No. 11/2017-Central Tax (Rate), No. 13/2018-Central Tax (Rate) Dated 26th July 2018 and 20/2019 -Central Tax (Rate) Dated 30th September 2019, it is required to go through these sections. 3.17 The relevant portion of Notification No. 11/2017 - Central Tax (Rate) serial No, 7, is reproduced below:- S.No. Chapter, Section or Heading Description of Services Rate (percent) Condition 7. Heading 9963 (Accommodation, food beverage services) (ii ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pply shall be substituted; (B) the Explanation shall be omitted. 3.19 Further, the rate and manner of tax is further changed by Notification No. 20/2019-Central Tax (Rate) dated 30th September 2019 amending Notification No. 11/2017 - Central Tax (Rate) dated 28.06.2017. The relevant portion of the same is given below:- In the said notification, - (i) in the Table, - (a) against serial number 7, for the entries relating thereto in column (3), (4) and (5), the following items and entries shall be substituted, namely, - (3) (4) (5) (i) Supply of hotel accommodation having value of supply of a unit of accommodation above one thousand rupees but less than or equal to seven thousand five hundred rupees per unit per day or equivalent. 6 - (vi) Accommodation, food and beverage services other than (i) to (v) 9 above Explanation : (a) For the removal of doubt, it is hereby clarified that, supplies covered by items (ii), (iii), (iv) and (v) in column (3) shall attract central tax prescribed against them ..... X X X X Extracts X X X X X X X X Extracts X X X X
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