TMI Blog2023 (7) TMI 704X X X X Extracts X X X X X X X X Extracts X X X X ..... cant provided commercial rental services discharged all GST liabilities. From 16-07-2018 applicant entered into an agreement with Sharda University for letting out property and till 15-07-2021 discharged all liabilities. From 01-08-2021 applicant started providing hostel services to the students of Sharda University and some other institutions. This means from 01-08-2021 applicant is not letting out property and hence will not fall under any lease or letting out of the building including a commercial, industrial or residential complex for business or commerce either wholly or partially. From the submitted record, it is clear that the applicant directly provides hostel services to students and receipt is generated in the name of V S Institute Hostel Private Limited. On going through the exemption Entry No. 14 of Notification No. 12/2017-CT (R) dated 28.06.2017 as well as CBIC's Circular No. 32/06/2018-GST dated 12th February 2018, it is found that the description of service is user based, meaning that, if the accommodation is used for residential or lodging purpose than it is immaterial who the user is. The said entry mentions Services by a hotel, inn, guest house, clu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (hereinafter referred as the applicant ). The applicant is a private limited company and provides hostel services to the students of educational institutions for a fixed term on annual basis. 2. The applicant has submitted application for Advance Ruling dated 24.01.2023 enclosing dully filled Form ARA-01 (the application form for Advance Ruling) along with annexure and attachments. The applicant in his application has sought advance ruling on following question/clarification- 1. Whether hostel accommodation provided by the Applicant to the students for residential purposes charging less than Rs. 7,000/- per day during the period from 01.08.2021 to 12.07.2022 is exempted from GST liability under the S.No. 12 and / or 14 of the Exemption Notification No. 12/2017-CT(Rate) dated 28.06.2017? 2. Whether hostel accommodation provided by the Applicant to the students for residential purposes charging less than Rs. 1, 000/- per day during the period from 13.07.2022 till today and also similar transaction to be undertaken in future is exempted from GST liability under the S.No. 12 of the Exemption Notification No. 12/2017-CT(Rate) dated 28.06.2017 as amended vide Notification No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... GL Bajaj, Daron Acharya, GNIT, Sharda University, Amity University and several others. Students are residing for a fixed term on annual basis. The hostel provides residential facilities including food, electricity, Wi-Fi, water etc. as inclusive services. The same is covered under the definition of the 'Residential Dwelling'. 6. The Applicant is providing the service of residential dwelling directly to the students, for which the Applicant is charging the rent as mentioned below: Table -A Type Room Period Hostel Fee Per day rate Medical Students Non-AC 1 Year 1,50,000 411 Medical students AC 1 Year 1,75,000 480 Other students Non-AC 10 Months 1,18,000 323 Other Students AC 10 Months 1,78,000 488 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sand 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. [S. No. 14 of Notification No. 12/2017-CT(Rate) refers] The true copy of the Circular No. 32/06/2018 is annexed herewith as Annexure - B. 3. The principal notification No. 12/2017 was further amended by CBIC to the limited extent of removing Column 3 of Entry 14 and at the same time widening the scope of Column 3 (the scope of exemption) of Entry 12. Thereby, the exemption continued to exist even after the amendment carried out by way of Notification dated 13.07.2022. 4. That after the amendment dated 13.012022 to Notification No. 04/2022-CT (Rate) the exemption is available only in case the hostel is rented to an unregistered person and the monetary condition of Rs. 1,000/- per day has been removed. The relevant portion of the Notification Now 04/2022-CT (Rate), dated 13.07.2022 are given below. against serial number 12, in column after the words as residence the words except where the residential dwelling is rented to a registered person was substituted and serial number 14 and the entries rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hostel is annexed herewith as Annexure-A. b. That the hostel building situated at 30/21, 22, Knowledge Park - 3, Gautam Buddha Nagar, Greater Noida, Uttar Pradesh - 201308 has been using for the purpose for residing of students. The map has been sanctioned by the Greater Noida Industrial Development Authority of Uttar Pradesh established in January 1991 under the UP Industrial Area Development Act 1976 for the residential as well as for commercial use. The true copy of the map of the hostel building is annexed herewith as annexure-B c. That the Applicant has rented out the building to Sharda University situated at Knowledge Park-Ill, Greater Noida, U.P. during the period from November, 2018 to July, 2021, vide agreement dated 16.07.2018. During this period, the entire consideration was charged to GST and due liability was duly discharged. All the GST compliances have been made and there is no default on the part of the Applicant. Such building was to be used as student hostel for the residential purpose for the students of Sharda University till July 2021. d. That the Applicant started providing hostel service from 01.08.2021, to the students of educational instituti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n given in the GST regime. In the erstwhile service tax law, section 65(105) of the Finance Act, 1994, provides the definition of taxable service for services provided by hotels, inns, etc, which generally involves staying for a shorter period as compared to the permanent or considerable time of stay, provides that the said service is providing accommodation for a continuous period of less than 3 months. The true copy of the relevant provision is annexed herewith as Annexure-F. i. That observation in Collins v. Uratemp Ventures Ltd. [(2012) 24 taxmann.com 134 (ECJ)], compelled the conclusion that 'dwelling' means a place where one lives regarding and treating as a home. It is a place where one lives and returns to sleep. Further, in Sharad Kumar Pandey vs Mamta Pandey, Crl. M.C. No. 4044 of 2009 of Hon'ble Delhi High Court, it was observed that the normal place for a dwelling is made with an intention to live there for a considerable time or to settle there. Therefore, residential dwelling is a residential accommodation that is not used for a temporary stay. It is to be noted that in a hostel there can be students staying for the long term and also for the shor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 97(2) (a) of the CGST Act 2017 being a matter related to applicability of a notification issued under the provisions of the Act. We therefore, admit the application for consideration on merits. 12. The applicant M/S V S Institute Hostel Private Limited is a private limited company and provides hostel services to the students of educational institutional institution for a fixed term on annual basis. Hostel services includes food, electricity, wi-fi, water etc. The annual hostel rent is below 1000/-per day. The applicant in his application has sought advance ruling on following question/clarification- 1. Whether hostel accommodation provided by the Applicant to the students for residential purposes charging less than Rs. 1,000/- per day during the period from 01.08.2021 to 12.07.2022 is exempted from GST liability under the Sl.No. 12 and / or 14 of the Exemption Notification No. 12/2017-CT(Rate) dated 28.06.2017? 2. Whether hostel accommodation provided by the Applicant to the students for residential purposes charging less than Rs. 1,000/- per day during the period from 13.07.2022 till today and also similar transaction to be undertaken in future is exempted from G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (5) ................ ................ ................ ................ ................ 12 Heading 9963 or Heading 9972 Services by way of renting of residential dwelling for use as residence. Nil Nil ................ ................ ................ ................ ................ 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 per day or equivalent Nil Nil The SI. No. of 12 and 14 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 has been amended by the vide Notification No. 04/2022-CT (Rate) dated 13.07.2022 and is reproduced as under- Table SI. No. Chapt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... required. Shops and establishment license are required for commercial establishment. Hence hostels falls under commercial establishment and hence GST should be applicable on hostel charges. In Education guide issued by CBIC which provides that in normal trade parlance residential dwelling means any residential accommodation and is different from hotel, motel, inn, guest house etc. which is meant for temporary stay. Since hostel is very much like hotel, guest house etc and is meant for temporary stay, so GST will be applicable on hostel charges. 16. From the documents provided by the applicant, it is clear that from 01-07-2017 to 15-07-2018 applicant provided commercial rental services discharged all GST liabilities. From 16-07-2018 applicant entered into an agreement with Sharda University for letting out property and till 15-07-2021 discharged all liabilities. From 01-08-2021 applicant started providing hostel services to the students of Sharda University and some other institutions. This means from 01-08-2021 applicant is not letting out property and hence will not fall under any lease or letting out of the building including a commercial, industrial or residential co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 18-GST dated 12 February, 2018 is as below- SI.No. Issue Clarification 1. Is hostel accommodation provided by Trusts to students covered within the definition of Charitable Activities and thus, exempt under SI. No. 1 of Notification No. 12/2017-CT (Rate). Hostel accommodation services do not fall within the ambit of charitable activities as define in para 2(r) of notification No. 12/2017-CT (R). 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. [SI.No. 14 of Notification No. 12/2017-CT (Rate) refers] 19. On going through the above exemption Entry No. 14 of Notification No. 12/2017-CT (R) dated 28.06.2017 as well as above discussed CBIC's Circular No. 32/06/2018-GST dated 12th February 2018, we find that the description of service is ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
