9911796707
TMI Blog2022 (6) TMI 697X X X X Extracts X X X X X X X X Extracts X X X X ..... at the description of service is user based, meaning that, if the accommodation is used for residential or lodging purpose then it is immaterial who the user is. The said entry mentions Services by a hotel, inn, guest house, club or campsite, by whatever name called, for residential or lodging purposes . The word 'hostel' not being specifically mentioned implies that the same would be covered under the term 'Whatever name called' - the scope of the entry is restricted to use of the accommodation unit for residential and lodging purpose only. The service of hostel is optional and not coming out from the package and separate consideration will be charged for providing such hostel facility to the students. In fact, the hostel fees are not a part of any package concerning commercial training coaching services rendered by the applicant. The Applicant is exclusively providing the Hostel Accommodation Service in isolation and no other service is clubbed or bundled along with the Hostel Accommodation Service. Thus, there is no question of Composite Supply u/s 2 (30) of the GST Act or Mixed Supply u/s 2(74) of the GST Act in the Case of the Applicant - Considering the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... New Delhi- 110001 (herein after referred as applicant) is Society registered under Societies Registration Act. 1860 with Registration No. S-10560/1986 (date of Registration - 27-02-1986). That Mody Education Foundation is registered as a Public Charitable Trust u/s 12AA of the Income Tax Act, 1961 having registration no. DLI(C)(I-1178). That MEF is running a CBSE affiliated School from class 3rd to 12th at NH-11, Laxmangarh, Distt. Sikar (Rajasthan) - 332311. EMF is registered under GST law having GSTIN 08AABTM0215E1Z5. MEF is also the Sponsoring body of Mody University of Science Technology; That Mody University of Science Technology (herein after referred as MUST) is a university established u/s 2(f) of the UGC Act, 1956 and providing educational services to its Students (Girls Students Only). MUST is registered u/s 10(23)(c) of the Income Tax Act, 1961 vide registration no. AAAJM1982F/08/14-15/T-0011/10(23C)(iv)/ITAT. MUST is also registered under GST law having GSTIN-08AAAJM1982F1Z4. That MEF has surplus infrastructure facilities after utilization thereof for its own activities which includes Hostels Rooms; That the surplus infrastructure which inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Boarding service provided by MEF to the students of MUST having value of service upto Rs 1000/- per day would be eligible for exemption under entry no. 14 of the notification 12/2017 CTR Dt 28-06-2017? ii) That the AAR has passed its order vide Advance Ruling No. RAJ/AAR/2021-22/02 dated 07-07-2021 given following ruling:- a) The Unit of Accommodation is Room; and b) Hostel Accommodation with F B Services is a mixed supply and liable to highest rate of GST iii) That MEF has appealed against the ruling of the AAR vide Application No. AD0808210014487 dated 06-08-2021, against which the Hon'ble Rajasthan Appellate Authority for Advance Ruling (AAAR) has passed Order No. RAJ/AAAR/01/2021-22 dated 27-10-2021, confirming following position under Law:- a) Hostel Seat shall be considered as a Unit of Accommodation in case of the Appellant i.e. MEF (Refer; Para 8.7 on Page 11 of the Order); and b) Accommodation Service along with F B shall be considered as Mixed Supply and liable to highest rate of Tax (Refer: Para 8.8 on Page 11 of the Order); Key Features of Proposed Hostel Accommodation Service:- Key Features of the proposed Hostel Accomm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Accounting Code (SAC) - 9963. 2. Applicability of Notification No. 12/2017-CT (Rate) and Tax Liability on Hostel Accommodation Service The clarification given by CB1C at S. No. 1 of Circular No. 32/06/2018-GST dated 12-2-2018 (Refer - Table I) is self-explanatory and by mere Literal Construction' of the language used by CBIC in its clarification, it is clear beyond doubts, that SI. No. 14 of Notification No. 12/2017 - C.T. (Rate) is applicable on the Hostel Accommodation Service. The verbatim of SI. No. 14 of Notification No. 12/2017 - C.T. (Rate) is produced below for ready reference:- TABLE 2 Sl.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 per day or equivalent. Nil Nil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per room, per suit whereas in hostels, -inns and dharmshalas, it fixes per room, per bed, per seat and per person. From the facts mentioned by the appellant, it would emerge that they provides accommodation service in hostel and fix the tariff on the basis of hostel seat, therefore, we agreed the contention of appellant and finds that hostel seat should be considered as a unit of accommodation. Thus, by the aforesaid order of AAAR, it is settled that in case of Applicant i.e. MEF, the Unit of Accommodation shall be a 'Hostel Seat' and not a Room or Dormitory as a whole. 5. Hostel Accommodation Service is provided Independently and not Bundled with any other Service: - The Applicant (MEF) is exclusively providing the Hostel Accommodation Service in isolation and no other service is clubbed or bundled along with the Hostel Accommodation Service. All other services including Education, Serving of Food and Beverages etc shall be directly provided by the Mody University of Science and Technology (MUST) to its students, for which they will separately charge from their students. Thus, there is no question of Composite Supply u/s 2 (30) or Mixed Supply u/s 2(74) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hostel seat provided by M/s Mody Education Foundation (MEF) to the student of M/s Mody University of Science and Technology (MUST) having value of service upto Rs. 1000/- per day would be eligible for exemption under Entry No. 14 of the Notification No. 12/2017-CT (R) dated 28.06.2017, with condition that this value should be in lieu accommodation facility only and should not be for mixed supply including food beverage etc. E. FINDINGS, ANALYSIS CONCLUSION: 1. We have perused the records on file and gone through the facts of the case and the submissions made by the applicant as well as the department. On the basis of submission made, we are of the view that the applicant i.e Mody Education Foundation (MEF) having GSTIN 08AAHCG0218N1Z1 is running a CBSE affiliated School from class 3rd to 12th at NH-11, Laxmangarh, Distt. Sikar (Rajasthan). The applicant is also the sponsoring body of M/s Mody University of Science Technology (MUST) which is providing educational services to its Students. The applicant is also registered as a Public Charitable Trust u/s 12AA of the Income Tax Act, 1961. 2. On the basis of written submission provided by the applicant, we observ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for exemption under Entry No. 14 of the Notification No. 12/2017-CT (R) dated 28.06.2017, with condition that this value should be in lieu accommodation facility only and should not be for mixed supply including food beverage etc. 6. As per ruling passed by the Hon'ble Rajasthan Appellate Authority for Advance Ruling (RAAAR) vide Order No. RAJ/AAAR/01/2021-22 dated 27-10-2021 , the appellate authority considered 'Hostel Seat' as a 'unit' in respect of Sr. No. 14 of Notification No. 12/2017-Central Tax (Rate), dated 28.06.2017. 7. Now, the applicant again filed this application seeking there-under exemption for their services under Sr. No. 14 of Notification No. 12/2017-Central Tax (Rate) as amended on the basis of fact that now they are providing the 'accommodation facility' only and not providing Food Beverages to the students of MUST. 8. The question before the authority is that whether activity of providing the hostel facility by applicant on the rent to students of MUST is exempt (where hostel accommodation charges will be less than Rs.1000/- per Hostel Seat per day) under Sr. No. 14 of the Notification No.12/2017-Central Tax (Rate) ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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; In view of above, we find that essential components of a composite supply are as under- - two or more individual supplies; - supply of goods or services, or any combination thereof: - made in conjunction with each other, - such supply does not constitute a composite supply; Further, tax liability on a mixed supply shall be determined as defined in Section 8 (b) of GST Act, '017 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. In the present case, we observe that the applicant will provide single service of 'hostel accommodation' for a single price of less that Rs. 1000/- per Hostel Seat. Being single taxable service, the supply is not a Mixed Supply under GST. In view of above, we find that supply of 'hostel accommodation service' by the applicant in the present matter is neither a comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rusts to students covered within the definition of Charitable Activities and thus, exempt under Sl.No. 1 of notification No. 12/2017-C.T.(Rate)? Hostel accommodation services do not fall within the ambit of charitable activities as defined in para 2 (r) of notification No. 12/2017-C.T. (Rate). 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-C.T. (Rate) refers] 13. On gone through of above exemption Entry No. 14 of the Notification No. 12/2017-CT (R) Dated 28.06.2017 as well as above discussed CBIC's Circular No. 32/06/2018-GST dated 12 February, 2018, we find that the description of service is user based, meaning that, if the accommodation is used for residential or lodging purpose then it is immaterial who the user is. The said entry mentions Services by a hotel, inn, guest house, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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