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2019 (2) TMI 1605 - AAR - GSTClassification of supply - Composite supply or mixed supply - service to the students for lodging along with food under MOU with the school / college - exemption under Sl. No. 14 of Notification No. 12/2017 CT (Rate) dated 28/06/2017 - rate of tax - Held that - The Applicant is offering several individual services in two different combinations to the recipients, depending upon their need for lodging facility. Each of the recipients, however, is charged a consolidated amount for the combination of services he wants to enjoy. The combination of services is, therefore, offered as a mixed supply within the meaning of Section 2(74). In accordance with Section 8(b) of the GST Act it is stated that, 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 - each of the combinations includes services taxable at 18% rate, which is the highest rate applicable to the services being offered vide Section 8(b) of the GST Act. Being mixed supply, value of the entire combination of services offered is taxable at 18% rate. Sl. No. 66 of the Exemption Notification is applicable to the services provided by or to an educational institution, as defined under clause 2(y) of the said notification. The Applicant is not an educational institution within the meaning of the above clause. Although the services are provided in terms of an MOU with St Michael s School, the Applicant charges the consideration on the individual students. Being liable to pay the consideration, such students are, therefore recipients of the Applicant s services and not the educational institution. Sl. No. 66 of the Exemption Notification is, therefore, not applicable.
Issues:
1. Admissibility of the Application 2. Interpretation of composite supply under GST Act 3. Applicability of exemption under Notification No. 12/2017-CT (Rate) 4. Classification and taxability of services provided Issue 1: Admissibility of the Application The Applicant sought a ruling on whether their service to students for lodging along with food constitutes a composite supply under the GST Act and is eligible for exemption under Notification No. 12/2017-CT (Rate). The Advance Ruling Authority found the application admissible under Section 97(2)(a) & (b) of the GST Act as the question raised had not been decided by any authority and no objection was raised by the Revenue officer. Issue 2: Interpretation of Composite Supply The Applicant provided services to students including lodging, housekeeping, laundry, medical assistance, and food under a consolidated charge. The Revenue suggested the services might fall under Composite Supply, but the Authority determined the services were not composite as different considerations were paid for different packages of services offered, making them mixed supplies taxable at the highest applicable rate of 18%. Issue 3: Applicability of Exemption The Authority clarified that the Applicant, not being an educational institution, did not qualify for exemption under Sl. No. 66 of the Exemption Notification. However, lodging facilities offered below ?1000 per day were exempt under Sl. No. 14 of the Exemption Notification, while food was taxable at 5% rate. Housekeeping and laundry services were classified and taxable at 18% under specific entries in the Rate Notification. Issue 4: Classification and Taxability of Services The Authority observed that the services offered were a mixed supply, not composite, as different considerations were charged for different service packages. As a mixed supply, the entire combination of services was taxable at the highest rate of 18% under Section 8(b) of the GST Act. The ruling stated that the value of the services offered would be taxable at the applicable rate, considering them as mixed supplies. In conclusion, the ruling declared that the Applicant's services were mixed supplies, not composite, and were taxable at the applicable rate. The decision was valid unless declared void under the provisions of the GST Act.
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