2020 (5) TMI 387 - AAAR - GST

Exemption from GST - renting of dormitory consisting of 12 beds and renting of 2 BHK where the charges per bed (in the case of dormitory) and per room (in the case of 2 BHK) is less than ₹ 1000/- per day - entry SI.No 13 of Notification No 12/2017 CT (R) dated 28-06-2017 - challenge to AAR decision - HELD THAT - On a conjoint reading of the clause (b) of Sl.No 13 and the exclusions, it is evident that the exemption under clause (b) applies to renting of rooms where the charges are less than ₹ 1000/- per day, renting of premises, community halls, kalayana Mantapsor open area, and the like where charges are less than ₹ 10,000/- per day and to renting of shops or other spaces for business or commerce where charges are less than ₹ 10,000/- per month. In the instant case, the Appellant had erected temporary accommodations at Kumbalagodu Village, Mysore Road, KengeriHobli, Bangalore North Taluk where the religious event was conducted. The Appellant is not renting out rooms but rather is renting out units of accommodation comprising of 2 bedrooms, hall, kitchen, restroom, toilet. The entire unit with facilities like water, electricity, cot, bed, pillow, bedspread and air-conditioner is given out on rent. The devotee is also given cooking facility in this unit. Therefore, a unit of accommodation of this kind which is termed by the Appellant as a 2BHK Category I type of accommodation cannot be considered as renting of rooms and will not be covered in the entry SI.No 13 of Notification No 12/2017 CT (R) dated 28-06-2017 - Similarly, the renting out of beds in a dormitory is also not akin to renting of rooms and hence it will not qualify for exemption under clause 13(b) of the said Notification. We agree with the ruling of the lower Authority and hold that the renting of the 2 BHK unit and the dormitory will be chargeable to GST as a single unit where the value of supply will be the charges for the full 2BHK unit / dormitory and not the charges for each room / bed and is liable to tax.in terms of entry SI.No 7 of Notification No 11/2017 CT(R) dated 28-06-2017 as amended by Notification No 20/2019 CT (R) dated 30-09-2019. AAR ruling upheld.

Summary

Issues Involved:
1. Condonation of delay in filing the appeal.
2. Exemption from GST on renting of dormitory beds.
3. Exemption from GST on renting of 2 BHK units.

Detailed Analysis:

1. Condonation of Delay in Filing the Appeal:
The Appellant sought condonation of a 23-day delay in filing the appeal, citing that the person in charge of taxation matters was occupied with a religious function. The impugned order was received on 10-10-2019, and the appeal was due by 09-11-2019 but was filed on 03-12-2019. The authority condoned the delay, exercising the power under the proviso to Section 100(2) of the CGST Act, considering the reasons as bona fide.

2. Exemption from GST on Renting of Dormitory Beds:
The Appellant argued that the charges for dormitory beds, which are less than ?1000 per bed per day, should be exempt under entry No 13(b) of Notification No 12/2017 CT (R) dated 28-06-2017. The lower authority ruled that the renting of dormitory beds is not akin to renting of rooms and thus does not qualify for the exemption. The appellate authority upheld this ruling, stating that renting out beds in a dormitory is not covered under the said notification and is liable to GST as a single unit.

3. Exemption from GST on Renting of 2 BHK Units:
The Appellant contended that the charges for renting 2 BHK units, which are less than ?1000 per room per day, should be exempt. The lower authority held that the renting of 2 BHK units, which include multiple rooms and facilities, does not qualify as renting of rooms under the exemption notification. The appellate authority agreed, stating that a 2 BHK unit is considered a single unit of accommodation and not individual rooms. Thus, it does not qualify for the exemption and is liable to GST as a single unit.

Conclusion:
The appellate authority upheld the lower authority's ruling, dismissing the appeal on all counts. The renting of dormitory beds and 2 BHK units does not qualify for GST exemption under entry No 13(b) of Notification No 12/2017 CT (R) dated 28-06-2017, and both are liable to GST as single units. The delay in filing the appeal was condoned due to bona fide reasons.