TMI Blog2022 (6) TMI 1167X X X X Extracts X X X X X X X X Extracts X X X X ..... Brochure of Hostel facilities, Break-up of fees in respect of facilities/services to be provided, License from the Local Authority, Details of rooms occupancy and Rent/ lease Agreement etc; we are not in the position to decide whether the accommodation services alongwith allied services like service of Light, water, food etc. are only to be provided by Hostel or other services will be there. In the absence of above required documents/information, we are not in position to decide whether the said supply is mixed or composite supply. Thus, in absence of supporting documentary evidence in support of services to be provided by the applicant, how it can classify in HSN provided in the CGST Act, 2017 and thus there is no question to discuss the exemption under Sr. No. 14 of the of the Notification No. 12/2017-CT(Rate) dated 28.06.2017 - no ruling advanced for want of requisite documents. - RAJ/AAR/2022-23/02 - - - Dated:- 19-5-2022 - VIKAS KUMAR JEPH AND M. S. KAVIA, MEMBER Present for the applicant : Shuchi Sethi, C.A. (Authorised Representatives) Note: Under Section 100 of the CGST/RGST Act, 2017, an appeal against this ruling lies before the Appellate Authority for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at time of enrollment for course that hostel fees are not part of package. The applicant intends to provides basic residential facilities which include well-maintained furnish residence, Light, water, food etc., and in consideration hostel intends to charge a nominal lump-sum fee of Rs. 1,02,000/- per year per student i.e., Rs. 279/-(Approx.) per day. Further students are also not allowed for stay of parents or friends in their rooms. APPLICANT'S INTERPRETATION Legal Provisions and Interpretation in light of Facts of the Case The charging section for GST i.e., Section 9 of the Central Goods and Services Tax Act 2017 provides as under 9. (1) Subject to the provisions of sub-section (2), there shall be levied a tax called the central goods and services tax on all intra-State supplies of goods or services or both, except on the supply of alcoholic liquor for human consumption, on the value determined under section 15 and at such rates, not exceeding twenty per cent., as may be notified by the Government on the recommendations of the Council and collected in such manner as may be prescribed and shall be paid by the taxable person. Notification No.12/2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4) mixed supply means two or more individual supplies of goods or services, or any combination thereof made in conjunction with each other by a taxable person for a single price where such supply does not constitute a composite supply. Illustration - A supply of a package consisting of canned foods, sweets, chocolates, cakes, dry fruits, aerated drinks and fruit juices when supplied for a single price is a mixed supply. Each of these items can be supplied separately and is not dependent on any other. It shall not be a mixed supply if these items are supplied separately; SECTION 8. Tax liability on composite and mixed supplies - 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 he treated as a supply of such principal supply; and (b) a mixed supply comprising two or more supplies shall be treated as a supply of that particular supply which attracts the highest rate of tax. From the above provisions it can be concluded that: When two or more taxable supplies either of goods or services or both occur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f a twit of accommodation below one thousand rupees per day or equivalent is exempted from GST. The relevant extract of the said notification is reproduced hereunder: S.No. Chapter, Section, Heading Group or Service Code (Tariff) Description of Services Rate (per cent) Condition 14 Heading 9963 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 er da or equivalent. NIL NIL That to qualify for the above-mentioned exemption the supplier of services must provide the service by way of hotel, inn, guest house, club or campsite, by whatever name called. To qualify for this exemption, the main question is that whether the Hostel will be covered under the hotel, inn guest house, club or campsite or not. In this regard the term Hostel or the terms hotel, inn, guest house, club or campsite is neither defined in any of GST Acts, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nk. In general parlance, INNs are an inexpensive lodging facility for usually has dormitory-style sleeping arrangements and planned activities. Therefore, in view of the above learned and widely definitions, it can be concluded that the Hostel can also be interpreted as INN, club, guest house, hotel where people stay and paying for their rooms and meals and other allied services. That the Government in his wisdom, while issuing the Exemption Notification has specifically used the term by whatever name called . which takes the wide coverage so as to include even other related terms/places which is working as lodge/hotel/inn. In other words, the exemption notification is even applicable to other service provider who actually providing the services of giving the space on rent for residence and not falling under the definition/scope of hotel, inn, guest house club or campsite' as the Notification specifies the term 'by whatever name called' which implies that even other related services providers will be exempted even though the same is not known to be hotels, inn etc. Therefore, in view of the above definitions and contentions stated above ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rification, it is clear that CBEC has considered both Hostel and Hotel are one and the same, Accordingly, concluded that the exemption under Sr. No. 14 of the Notification No. 12/2017-C.T. (Rate) dated 28.06.2017 is also available on Hostel facility provided to the students. That this exemption was also available under erstwhile Service tax vide Sr No 18 of Notification No 25/2012 -ST dated 20.06.2012 i.e., Services by hotel, inn, guest house, club, campsite by whatever name called, for residential or lodging purpose, having declared tariff of a unit of accommodation below rupees one thousand per day or equivalent . The above similar view has been confirmed by Authority for Advance Rulings of Maharashtra in case of M/s Ghodawat Eduserve LLP (Order No GST-ARA-72/2019-20/13-51 dated 27.08.2021) where the applicant in exactly similar background and in relation to the same service, asked the following questions: Question 1. Whether the activity of providing the hostel on the rent to various students by applicant is exempt (where hostel fees charged per student per day is much less than Rs. 1000/-)? Question 2. If is it exempt it shall be claimed as exempted unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Whether the activity of providing the hostel on the rent to various students by applicant is exempt (where hostel fees charged per student per day is much less than Rs. 1000/)? Answer: - Answered in Affirmative. Question 2. If is it exempt it shall be claimed as exempted under Serial Number 12 or Serial Number 14 of Notification No 12/2017-Central Tax (Rate) (as amended time to time) dated 28.06.2017. Answer: - The present activity of the applicant is exempted under Serial Number 14 of Notification No. 12/2017-C. T. (Rate) dated 28.06.2017 (as amended time to time). Now, with reference to certain judicial pronouncements, applicant would like to further assess this applicability in support of our say as follows: (a) GST AAR Chhattisgarh in case of Kamal Kishore Agarwal Ramnath Bhimsen Charitable Trust (Order No STC/AAR/11/2018 dated 2nd March 2019) In this Advance Ruling authority pronounced that: The activity of providing accommodation services by the applicant in their hostel for which the applicant is collecting an amount below the threshold limit of Rs. 1000/ per day and no other charges are being collected for providing other all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the accommodation is used for residential or lodging purpose then it is immaterial who the user is. The services provided by such hostel, for residential and lodging purposes would be covered by the scope of notification entry where the declared tariff of a unit of an accommodation is below one thousand rupees per day. Therefore, the scope of the entry is restricted to use of the accommodation unit for residential and lodging purpose. It is also pertinent here to discuss the Advance Ruling pronounce in the matter of IN RE: SRISAI LUXURIOUS STAY LLP 2020 (36) G.S.T.L. 462 (A.A.R GST Kar.) in this respect. The facts of the Ruling are as under: The applicant in said ruling was providing following services along with lodging service in hostel Meals which includes breakfast, lunch and dinner Fully furnished rooms Round the clock security guards at the premises Housekeeping facilities Washing Machine facilities Television in each room Internet facilities (WIFI available) Vehicle parking facilities The above facilities were part and parcel of the services provided for which single price was charged from the servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ious students where fees charged per students per day per room is much less than Rs. 1000/- per day per person. Therefore. considering the provisions of Notification No 12/2017-CT (Rate) dated 28.06.2017 Entry No. 14, and the clarification given by CBIC in circular No. 32/06/2018 dated 12th February 2018, applicant is of opinion that, his activity of providing hostel facility is satisfying the conditions of Entry Sr.no. 14 of said Notification and hence would be exempt from taxes. B. QUESTIONS ON WHICH THE ADVANCE RULING IS SOUGHT A. Whether the activity of providing the hostel facility on the rent to various students by applicant is exempt (where hostel fees charged per student per day is much less than Rs.1000/-)? B. If it is exempt, under which entry of Notification No.12/2017-Central Tax (Rate) (as amended time to time) dated 28.06.2017, it is covered? C. PERSONAL HEARING In the matter personal hearing was granted to the applicant on 29.03.2022 at NCRB, Statue Circle, Jaipur. Miss Shuchi Sethi, CA (Authorised Representatives) of applicant appeared for PH. During the PH, they reiterated the submissions already made in the application. She submitted additio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plicant in their written submission stated that Exemption is available for their services under Sr. No. 14 of Notification No. 12/2017-Central Tax (Rate) as amended, for Services by a hotel, inn, guest house, club or campsite, by whatever name called, for residential or lodging purposes, having value of supply of a unit of accommodation below one thousand rupees per day or equivalent. 5. In compliance with the information/ document asked by the Authority, the applicant vide additional submission dated 12.04.2022 stated that: - they have no rent agreement of Hostel as location and premises has not been finalized. -As no location is final therefore, there is no License obtained from the Local Authority. -since the entity has not reached in operational stage yet, no material like brochure has been prepared by the applicant till date. -Hostel facilities depending upon the choice of student which will include Single Occupancy, Double Occupancy and Triple Occupancy. 6. The question before the authority is that whether activity of providing the hostel facility on the rent to various students by applicant is exempt (where hostel fees charged per student per day is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dependent on any other. It shall not be a mixed supply if these items are supplied separately; Further, tax liability on a mixed supply shall be determined as defined in Section 8 (b) of GST Act, 2017 which is as below- a mixed supply comprising two or more supplies shall be treated as a supply of that particular supply which attracts the highest rate of tax. 7.4 the relevant portion of Annexure to Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 and Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, are as below- ANNEXURE to 11/2017-CT (R) Dated 28.06.2017 Sl.No. Chapter, Section, Heading, or Group Service Code (Tariff) Service Description (1) (2) (3) (4) 76 Group 99632 Other accommodation services 77 996321 Room or unit accommodation services for students in student residences 78 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re keenly required. Further, Brochure mentioning thereunder the facilities / services which to be provided to the occupants of the said Hostel and Break up of fees to be charged from the occupants is also required to decide whether it is accommodation lodging service or otherwise. Moreover, we find that the services to be supplied in the present case are more than two but in the absence of Brochure of Hostel facilities, Break-up of fees in respect of facilities/services to be provided, License from the Local Authority, Details of rooms occupancy and Rent/ lease Agreement etc; we are not in the position to decide whether the accommodation services alongwith allied services like service of Light, water, food etc. are only to be provided by Hostel or other services will be there. In the absence of above required documents/information, we are not in position to decide whether the said supply is mixed or composite supply. Thus, we are of the view that in absence of supporting documentary evidence in support of services to be provided by the applicant, how it can classify in HSN provided in the CGST Act, 2017 and thus there is no question to discuss the exemption under Sr. No. 14 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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