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TMI Blog2023 (7) TMI 870X X X X Extracts X X X X X X X X Extracts X X X X ..... hey stated that they are into the business of developing, running, subletting and managing paying guest accommodation, service apartments, flats aimed to suit all types of customers by whatever name called. 3. In view of the above, the applicant has sought advance ruling in respect of the following questions:- a. Whether PG/Hostel Rent paid by inhabitants qualify for GST exemption, since they are used as residential dwelling? Exemption entry No. 12 of Notification No. 9/2017 dated 28th September 2017. b. Whether the charges collected towards allied additional services provided by the LLP would be considered as a bundled service along with the service of providing of Hostel/Paying guest? c. Whether GST on reverse charge will be applicable on the rental to be paid to the landowners? 4. Admissibility of the Application : The applicant claimed that the questions on which advance rulings have been sought are with regard to "Applicability of a notification issued under the provisions of the CGST Act 2017" and "Determination of the liability to pay tax on any goods or services or both", which are covered under Sections 97(2) (b) and (e) respectively of the CGST Act 2017 and hence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns in like matters and differ from each other only on a few specific provisions. Therefore, unless a mention is particularly made to such dissimilar provisions, a reference to the CGST Act would also mean reference to the corresponding similar provisions in the KGST Act. 9. We have considered the submissions made by the applicant in their application for advance ruling. We also considered the issues involved on which advance ruling is sought by the applicant and relevant facts along with the arguments made by the applicant & the submissions made by their learned representative during the time of hearing. 10. The applicant stated that they are into the business of managing Paying Guest Accommodation, in addition to the other businesses, to suit all type of customers by whatever name called. They also stated that they are specifically focused on provision of Boarding and Lodging facilities for inhabitants and also provide the following ancillary services to the inhabitants. a. Meals which includes Breakfast, Lunch and Dinner. b. Fully furnished rooms c. Round the clock security guards at the premises d. House Keeping facilities. e. Washing Machine facilities f. Televisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urposes when value of supply is below One thousand rupees are liable to GST w.e.f. 18.07.2022. 14. The applicant, at para 2 of column 15 of the application, admitting that they provide Boarding and Lodging facilities to the inhabitants of the hostel, claims that the immovable property being used for providing accommodation is a residential dwelling & is used as residence by the inhabitants and thereby the rent received on such accommodation qualifies for GST exemption in terms of entry number 12 of Notification 12/2017-Central Tax (Rate) dated 28.06.2017. In view of the said claim, the core issue before us to decide is whether the accommodation being provided by the applicant to the inhabitants qualify to be a residential dwelling, for use as residence and thus qualifies for GST exemption or not. 15. We observe that the term 'residential dwelling' is neither defined in the Notification nor in the CGST Act 2017/rules made there under. However the Education guide on Taxation of services, issued by the CBIC under erstwhile Service Tax Law, at para 4.13.1 while answering the question "What is a 'residential dwelling'?" directed to interpret the term 'residential dwelling' in terms of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow contends that their services are covered under "services by way of renting of residential dwelling for use as residence" as the said entry No 14 has been removed from the Notification No. 12/2017 supra. In view of the above, it is evident that the applicant contends in a way which is completely contradictory to their own admission, apparently to circumvent the tax liability. 19. The applicant have put forth their argument relying on the judgment of the Hon'ble High Court of Karnataka in the case of Taghar Vasudeva Ambarish (WP No. 14891 of 2020(T-Res)) dated 7-2-2022. It is pertinent to mention here that the said Judgment has been appealed against before the Hon'ble Supreme Court of India, under the Special Leave Petition (Civil) No. 29980/2022. Further the issue under dispute in the WP No. 14981/2020, before the Hon'ble High Court of Karnataka was about the renting of the residential premises to a lessee company whereas in the instant case the issue is renting of immovable property taken on rent by the applicant and the same is partitioned and rented such partitions by arranging cots with common bathroom. Thus the issues are different and hence the Hon hie High Court of Karnat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opt for the said services. An inhabitant without a vehicle does not require vehicle parking facility; some of the inhabitants may not opt for food i.e. breakfast etc., washing machine facility, television etc. Thus these are the optional facilities / separate services and hence can't be naturally bundled services as an inhabitant can still stay at the hostel without utilizing these facilities. Therefore these facilities do not affect the main supply i.e. the main supply would not be affected even if one or more of these services are not provided and thus these facilities/services are not naturally bundled with the main supply of hostel/paying guest accommodation and are separate services which need to be taxed separately. 24. Now we proceed to consider the third question i.e. Whether GST on reverse charge will be applicable on the rental to be paid to the landowners? The applicant's reference to "landowners" in the question appears to be with regard to the owners of the building which is claimed as residential dwelling. In this regard we invite reference to the Notification No. 13/2017-Central Tax (Rate) dated 28.06.2017, as amended. A new entry no. 5AA in RCM Notification No. 13 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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