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TMI Blog2023 (7) TMI 704X X X X Extracts X X X X X X X X Extracts X X X X ..... l 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. 04/2022-CT (Rate) dated 13.07.2022? 3. As Per declaration given by the applicant in Form ARA-01, the issue raised by the applicant is neither pending nor decided in any proceedings under any of the provisions of the Act, against the applicant. 4. The applicant has submitted that- 1. VS Institute & Hostel Private Limited ('Applicant) is a private limited company incorporated on 19.03.2007, is registered under CGST Act, 2017 having GSTIN 09AACCV6409R1ZL for its principal place of business at 30/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 The applicant receives rent below Rs. 1000/- per day per person. The true copy of the annual rent receipt is annexed herewith as Annexure - C. 5. The applicant have submitted their interpretation of law as under- 1. The Applicant submits that the transaction undertaken by it during the period from 01.08.2021 till today and similar transactions to be undertaken in future is of rendition of service by way of renting of hostel rooms to the students who are charged less than Rs. 1,000/- per day as mentioned in Table A of the statement of facts and such transaction is covered by Entry 12 and 14 of the Notification No. 12/2017-CT (Rate), dated 28.06.2017 ('exemption notification'). The said exemption Notification exempts the transaction of renting of hostel rooms for residential purposes to the students who are charged less than Rs. 1000/- per day per person through out the period. The relevant part of the Exemption Notification is reproduced below: Entr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnexed herewith as Annexure- C 5. In view of the amendment vide Notification No. 4/2022-CT (Rate) dated 13.07.2022, the transaction undertaken by the Applicant from 01.08.2021 till today and similar transactions in future would be exempted because all the students are unregistered persons and they occupy the hostel rooms only for the purpose of resident or dwelling during their curriculum in the educational institutions. 6. The issue raised in the advance ruling, whether renting of the hostel to student for accommodating or dwelling amounts to use as residence, came to be decided by the Hon'ble High Court of Karnataka in W.P. No. 14891 of 2020 (T-RES), decided on 07.02.2022, wherein in Hon'ble court of Karnataka concluded in favour of the Applicant and held "leasing out residential premises as hostel to students and working professionals is covered under Entry 13 of Notification No. 9/2017, dated 28-9-2017 namely 'Services by way of renting of residential dwelling for use as residence ' issued under the Act. the petitioner is held entitled to benefit of exemption notification. "Thus, in view of above legal position the transaction undertaken and to be undertaken ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 true copy of rooms of hostel and sample ID card of student residing in the hostel are collectively annexed herewith as Annexure-C. e. That the expression 'hostel' has been defined in Advance Law Lexicon - Vol. II Ramnath Aiyar, 6th Edition, as 'Hostel' means a building which provided for persons generally or for a class or class of persons, residential accommodation other than in separate and self-contained sets of premises, and either board or facilities for the preparation of food adequate to the needs of those persons, or both. Therefore, the hostel is a residential accommodation. The true copy of the Advance Law Lexicon -Vol. II Ramnath Aiyar, 6th Edition and Judicial Officer Law Lexicon - Vol. II Justice C. K. Thakker is annexed herewith as Annexure-D. f. That the Applicant is fulfilling the twin conditions to cover under Entry No. 12 of the Notification No. 12/2017-CT (Rate), dated 28.06.2017 ('Exemption Notification') namely 'Services by way of renting of residential dwelling for u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... des hostel service to students of various universities for the period of minimum 1 -year session. Therefore the transaction in question fulfilling the condition - (a) to c aim e exemption under the exemption. The usage of premises to provide hostel services is residential dwelling. 9. That the word 'residence' is generally understood as referring to a person in connection with the place where he lives or one who dwells in a place for a considerable period of time. There are two classifications of the meaning of the word 'residence'. The first is in the form of permanent and temporary residence and the second classification is based on de facto and de jure residence. The de facto concept of residence can also be understood clearly by the meaning of the word 'residence' as given in the Black Law Dictionary, 8th Edition. It is given that the word residence means bodily presence as an inhabitant in a given place. In Bandu Rayji Nikam v. Achayatna Deshbhushan Shkshan Prasark Mandal, Kolhapur [(2002) SCC OnLine Bom 896] it was observed that Student Hostel was to be used for sleeping, eating, studies, etc. It cannot be described as 'Non-residential' use. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 13.07.2022? 13. Applicant started providing hostel service from 01.08.2021, to the students of educational institutions like 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 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. From 01.08.2021, Applicant has started to provide the hostel service directly to the students of educational institutions like GL Bajaj, Daron Acharya, GNIT, Sharda University, Amity University and several others without charging Tax Liability of GST. Students are residing for a fixed term on annual basis. It can be inferred that nature of service has not changed from 01.08.2021 only the provider of services has changed. 14. The relevant portion of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, as amended, reads as under- In exercise of the powers conferred by s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntended to exclude Hostel services, then it would have been mentioned in the above list as the word Hostel is neither a new word or uncommon word. Also, the Room or unit accommodation services provided by Hostels is clearly mentioned under HSN code 996322. 15. Now a question arises whether hostels are provided for residential dwelling or commercial purpose in order to decide applicability of GST on Hostel charges. The following are the arguments in favour of levying GST on hostel charges: 1. Hostels are mainly maintained for commercial benefit (i.e for earning income / profit). So it is at par with Hotels and hence GST is applicable on Hostel charges. 2. In most of the cases the hostel operator is not necessarily the owner of the residential property. They use to take the property on hire from one of more landlords and then give it on rent to students I working professional. So combining the above two aspects it is clear that hostels are maintained for commercial purpose. 3. In order to run hostel the license from Shop and establishment Act is required. Shops and establishment license are required for commercial establishment. Hence hostels falls under commercial establishme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (5) 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 18. Moreover, the relevant portion of CBIC's Circular No. 32/06/2018-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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not applicable in the instant case as Finance Act 1994 is not in existence after Introduction of GST Act. The tax laws are governed by GST Act and other allied laws only. RULING Question 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? Answer: Replied in Affirmative. Question 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 Sl.No. 12 of the Exemption Notification No. 12/2017-CT(Rate) dated 28.06.2017 as amended vide Notification No. 04/2022-CT (Rate) dated 13.07.2022? Answer: Replied in Negative. 23. This ruling is valid only within the jurisdiction of Authority for Advance Ruling Uttar Pradesh and subject to the provisions under Section 103(2) of the CGST Act, 2017 until and unles ..... X X X X Extracts X X X X X X X X Extracts X X X X
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