TaxTMI 
TaxTMI 
2021 (11) TMI 858
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....same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the Central Goods and Service Tax Act would also mean a reference to the same provisions under the Tamil Nadu Goods and Service Tax Act. HEALERSARK RESOURCES PRIVATE LIMITED, No.72, Vengadmangalam main road, Pommar, Vadapalani, Chennai 600048 (hereinafter called the 'Applicant') is registered under the GST Vide GSTIN 332100000255ARB. They have sought Advance Ruling on the following questions:- 1. What is the applicable GST SAC cod and the GST rate applicable for the supplies made by it to M/s. Apollo Med Skills Limited (AMSL). 2. Is it a composite supply or a mixed supply? 3. Whether the service is exempted vide Notification No. 12/2017-CT (Rate) dated 28.06.2017. The Applicant has submitted the copy of application in Form GST ARA 01 and also submitted a copy of Challan evidencing payment of application fees of Rs. 5,000/- each under sub-rule (1) of Rule 107 of CGST rules 2017 and SGST Rules 2017. 2.1 The applicant has stated that they are into the business of hospitality providing boarding, lodging facilities and such other services to M/s. Ap....
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...., Blankets and Bed Sheets for each candidate; vii. Plates and Glasses for each candidate; viii. Kitchen Utensils and Vessels for cooking and serving food; ix. On call Doctor, First Aid kit, Fire Extinguisher; x. Safety lockers for Students; xi. Appointment, of separate wardens for Boys and Girls to ensure students safety; xii. Depute House Keeping staff; xiii. Installation of RO water purifiers in both Boys and Girls Hostel; xiv. electrification for required number of points for Lights, fans etc; xv. Recreation facilities such as Carrom Board, Chess, Ludo, etc; xvi. Genset for 24 hours Power Backup for both Boys and Girls Hostels; xvii. Installation of CCTV camera; xviii. Any other facility in compliance with all relevant rules, regulations as may be required. * The applicant has stated that in consideration for the above services provided by them, an amount of Rs. 9,000/- per candidate per month (i.e., Rs. 300/ per candidate per day) is charged by the applicant as mentioned below,- i. Rs. 3500/ (i.e., Rs. 117/- per candidate per day) towards the accommodation of the candidate at a fixed cost. ii. Rs. 5,500/- (i.e., Rs. 183/- per candidate per day) to....
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....s required to provide boarding and lodging facilities to the candidates enrolling for these courses. In this regard, AMSL has engaged the applicant, to provide the boarding & lodging facilities and such other agreed services, to AMSL in terms of SOP provided by the Government with respect to implementation and furtherance of its projects under DDU GKY. for the purpose of the above, it was agreed that the applicant would tie up with various other third party service providers to ensure that such agreed services are rendered to AMSL. As per the terms of the agreement, the consideration payable to the applicant shall include the fixed and variable costs related to provision of the agreed services. The applicant shall charge Rs. 3000/ or Rs. 3,500/ per candidate per month depending upon the location towards accommodation services provided which shall be a fixed cost. The applicant shall charge Rs. 4,500/ or Rs. 5,500/ per candidate per month depending upon the location of provision of food and other facilities based on due actual number of candidates residing and availing the services at the Hostel. 2.4 The applicant is of the view that since there are two or more supplies being made,....
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....red to some of the indicators mentioned in the CBEC Education Guide to ascertain such normal and frequent, practices. Further, applying the definition of Principal Supply as per Section 2(90) of CGST Act, 2017, the applicant has viewed that for the service in hand, the primary and predominant activity of the applicant is to provide accommodation to the candidates at the hostels; that they have created the infrastructure to mainly provide the services of accommodation by taking, up hostel buildings etc., on rent/lease and then supplying a significant package of services to the occupants; that the supply of food and other amenities to candidates is an ancillary but an integral part, of the principal supply; that the case in hand can be compared to the example of a Hotel providing the facility of breakfast cited in the Education Guide, The same has been considered to be a composite supply with the principal supply being accommodation service. Hence the applicant is of the view that the activity is a composite supply where the principal supply is accommodation service. 2.7 In view of the aforesaid facts, the applicant, has stated that in case of composite supply, the tax rate of the p....
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....cing collection of lodging and boarding charges, accounts of the applicant to establish other facilities provided for along with the relevant costing and documentary evidence for schemes approved by Deen Dayal Upadhyay Grameen Koushalya Yojana. The applicant was also asked to submit the details on duration of stay by the inmates, number of inmates accommodated in a room. The Members also gave instructions to state Assessment circle to verify the place of business of the applicant and report. 3.2 The applicant vide their letter dated 26.07.2021 informed that their new address is as follows:- Vanagaram Ambattur Road, Ayanambakkam, Ambattur Industrial estate, C/o Apollo Hospitals Campus, Adjacent, to Apollo Nursing College. Chennai 600005 and the operational Hostel addresses are as follows: 1. No.5, Sathyamoorthy Street, Devaraj nagar, Dasarathapuram, Saligramam, Chennai 600093 2. Lord Venkateshwara college of Engineering campus, Puliyambakkam village, Walajahbad Taluk, Kanchipuram District. 631 603. 3.3 The Assistant Commissioners of Vanagaram, Kanchipuram (Rural) and Saligramam Assessment circles were instructed vide the letter dt.27.07.21 to visit the places of business loca....
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.... 4. The jurisdictional State authority submitted the following:- (i) Kanchipuram (Rural) Assessment circle: The premises at Lord Venkateshwara Engineering college campus was verified on 09.08.21, wherein training was conducted by AMSL and the accommodation was provided by the college. (ii) Vanagaram Assessment circle:- The circle AC has reported that the place of business of M/s. Healers Ark Resource at Vanagaram was visited on 30.07.2021, which is the administrative office of the applicant and that they are engaged in the activities like providing facility of lodging and boarding youth in various health care related vocational programmes; that the supply is composite in nature and the SAC code is 996311 and the rate chargeable is 18%; that the benefit of notification no. 12/2017 cited supra is not available to the applicant as the notification provides for daily rate based lodgings and the applicant has been charging on monthly / annual basis for the lodging service rendered. (iii) Saligramam Assessment circle:-- The premises at No.5, Sathyamoorthy Street, Devaraj nagar, Dasarathapuram, Saligramam. Chennai 600093 was visited on 03.08.2021 and statement of State Head Manager ....
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....cant do not hold lien of such premises. The applicant in this regard has referred to the extension of service provider agreement dt. 01.09.2020 wherein it was agreed to provide the activities enumerated in the Principal agreement for a period of 2 years effective from 01.09.2020 and stated that no activity is being carried on in the hostels at present due to the prevailing pandemic situation and the activities would resume once the Government issues guidelines for the conduct of the training sessions. Therefore, the questions raised by the applicants as above are admissible before this Authority under Section 95a read with Section 97(2) of the CGST/TNGST Act, 2017. 7.1 From the submissions of the applicant, it is seen that the applicant has rural into a service provider agreement on 23.09.2017, wherein as part of implementation of its projects under DDU-GKY scheme of Ministry of Rural Development, AMSL, is establishing training centres in the state of Tamilnadu for training and skilling of healthcare professionals and is required to provide boarding and lodging facilities to the candidates /students enrolling for the courses. The scope /description of the services expected of the ....
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....e charged GST at the rate of 18% on the rental charges and 5% on the food bill, classifying both the services under SAC 996311. 7.2 On the interpretation of law, the applicant has stated that, as part of implementation of its projects under DDU-GKY, AMSL is required to provide boarding and lodging facilities to the candidates enrolling for these courses and such other agreed services in terms SOP provided by the Government. The applicant has offered to undertake the 'Hospitality' services of boarding and lodging for the enrolled candidates. As per the terms of agreement entered into by the applicant with AMSL, the consideration payable shall include fixed and variable cost towards accommodation and provision of food and other facilities based on the actual number of candidates availing the services at the hostel. The applicant has stated that, their primary and predominant activity is to provide accommodation to the candidates at the hostel, the supply of food and other amenities is ancillary but an integral part of the principal supply. The applicant has stated that the activity is a composite supply, where the principal supply is accommodation services. The applicant has stated ....
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....pplicant as per the scope of the agreement entered into with AMSL is a composite supply with provision of accommodation to the candidates/students enrolled for the vocational courses in health care under the DDU GKY scheme as the principal supply and if so, whether the entire activity is exempted under Si. No. 11 of Notification no. 12/2017-CT (Rate) dt. 28.06.2017. I find that, the question raised is relevant to the facts of supply being made by the applicant, and also find that the classification opined by the learned SGST Member under 'SAC 998599 Other Support Services n.e.c.' is a residual entry to be adopted in cases where the supply cannot be suitable classified under the relevant category, which is not the case in hand, hence I take up the questions raised bv the applicant, and extend my findings as under. 9.2 Before considering the situation, the statutory provisions are examined as under: Section 2(30) of the GST Act., 2017 defines Composite supply as follows:- (30) "composite supply" means a supply made by a taxable person to a recipient consisting of two or more; taxable supplies of goods or services or both, or any combination thereof, which are naturally bundled an....
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.... the services provided are independent. The agreement entered into explicitly expresses that the service required from the applicant is hospitality services of separate accommodation for girls and boys along with provision of food and other agreed services relating to amenities. Therefore the entire supply is naturally bundled in the course of business of hospitality services and the principal supply envisaged in the agreement is provision of accommodation while provision of food and other amenities are bundled in the course of extending, the hospitality services by the applicant to AMSL. From the foregoing, I conclude that the services provided by the applicant to AMSL is a composite supply of 'hospitality services' in which provision of accommodation is the principal supply. 9.3 In respect of composite supply, the liability to tax is governed by the provisions of Sections 8(a) of the CGST Act, 2017 which is as under:- "8. The' tax liability on a composite or a mixed supply shall be determined in the following manner, namely: (a) a composite supply comprising two or more supplies, one of which is a principal supply, shall be treated as a supply of such principal supply; In t....
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....d on by the applicant is extracted below:- S.No. Issue Clarification 1 Is hostel accommodation provided by Trusts to students covered within the definition of Charitable Activities and thus, exempt under Sl. No. 1 of notification No. 12/2017-CT (Rate). Hostel accommodation services do not fall within the ambit of charitable activities as defined in para 2(r) of notification No. 12/2017-CT(Rate). However, services by a hotel, inn, guest house, club or campsite, by whatever name called, for residential or lodging purposes, having declared tariff of a unit of accommodation below one thousand rupees per day or equivalent are exempt. Thus, accommodation service in hostels including by Trusts having declared tariff below one thousand rupees per day is exempt. [Sl. No. 14 of notification No. 12/2017-CT(Rate) refers] Reading the exemption and the clarification provided, it is seen that services of providing accommodation in hostels falling under SAC 9963 are covered under Sl.no. 14 provided the value of supply of a unit of accommodation is below or equal to Rs. 1000/ per day. Further as clarified in the circular, the declared value of a unit of accommodation is to be below Rs. 1000 ....