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TMI Blog2024 (8) TMI 294X X X X Extracts X X X X X X X X Extracts X X X X ..... visions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, the expression 'GST Act' would mean CGST Act and MGST Act. 1. FACTS AND CONTENTION - AS PER THE APPLICANT: 1.1 The Applicant, Maharashtra Jain Education Society, (hereinafter referred as 'the Applicant' for brevity) is registered with the Charity Commissioner, Pune Division, Pune, under the registration No F-1993 dated 21st November 1978. 1.2 The Applicant is also registered as a Charitable Trust under Section 12AA of the Income Tax Act, 1961 vide the order of registration in Form No 10AC dated 23rd September 2021. 1.3 The Applicant is inter-alia engaged in providing accommodation services in the hostels run by the Society. Such services are provided only to the students studying in 11th standard up to the students pursuing graduation, for the academic year from 1st July to 30th April and in the School / College vacation period, from 1st May to 30 June. These services are provided as per the needs of the student either for examination or for undergoing educational courses. 1.4 The accommodation is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rity Deposit of Rs. 10,000 is taken from the students of the hostel. A concession in fees is provided to the students in need based on various factors. A sample copy of the receipt of the hostel fees for the academic year from the student is submitted on record. 1.7 The fees for hostel accommodation services charged from the student is Rs. 10,000 per month for the vacation period from 1st May to 30th June as per the needs of the students either for examination or for undergoing educational courses. In this case also, a refundable Security Deposit of Rs. 10,000 is taken from the students. A sample copy of the receipt of hostel fees for the vacation period from the student is submitted on record. 1.8 The estimated fees collection for the hotel accommodation during the financial year 2022-23 will be as under: Sr.No. Particulars Amount Period of Stay 1 Term Fees for the academic year from 294 students @ Rs. 1,10,000 3,23,40,000 1st July, to 30th April 10 Months, 2 Vacation Fees for the vacation period from 50 students @Rs. 10,000 per month for 2 months 10,00,000 1st May, to 30" June - 2 Months (in continuation to academic year). Total 3,33,40,000 1. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The applicant is mainly providing hostel accommodation services to the students. However, to provide such services, the following services are also jointly being provided to the students:- * Mess/Canteen: The students are provided meals in the mess/canteen; * Facilities provided in the room: The students are provided bunk beds, steel cupboards, study tables, chairs, clothes drying stands, fixtures and fittings; * Solar water heaters: The hostel has solar water heaters which ensures hot water facility to the students; * Other facilities: The hostel consists of a dormitory section, a community hall, modern mess equipments, and utensils, computers for the students, parking spaces, play area, auditorium, study area with internet connection. 2.2.2 The applicant wishes to submit that all the above-mentioned services are provided in order to provide the main service of hostel accommodation. In this regard, reference is given to the definition of the term 'composite supply' provided under clause 30 of Section 2 of the CGST Act, 2017. The same has been reproduced below for your ease of reference:- Section-2(30):-"composite supply" means a supply made by a taxable person to a reci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plies are provided in order to provide the main supply of hostel accommodation. Thus, hostel accommodation service is the principal supply and the other supplies are merely ancillary to it. * Thus, the provision of hostel accommodation services along with the other services would qualify as a composite supply. * Being a composite supply, it would be leviable to tax at the GST rate applicable to the principal supply of hostel accommodation service. 2.2.7 In light of the above, we wish to bring your attention towards the Dictionary meaning of the term 'renting'. The same means 'allowing someone to use something in return for payment'. The Applicant wishes to submit that the hostel accommodation services are provided to the students in lieu of the hostel charges that they pay for staying in the hostel. Such hostel charges are rentals being paid by the students for availing the hostel accommodation services. Thus, the provision of hostel accommodation services may be termed as renting of immovable property. Thus, the first condition required to be satisfied for the applicability of Serial Number 12 of the Exemption Notification is satisfied in the case of the Applicant. 2.3 Hoste ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stantiate that the hostel accommodation services provided by the Applicant would qualify as a residential dwelling based on the below submissions: A. Stay in hostels do not qualify as a temporary stay: The term 'temporary stay' is not defined anywhere in the CGST Act, 2017 or under the Finance Act, 1994. Reference is thus drawn to the definition of the term 'temporary residence' as per the Law Insider Dictionary. The same has been reproduced below for your ease of reference: "temporary residence means a place where the person abides, lodges, or resides, including, but not limited to, vacation, business, or personal travel destinations in or out of this state, fora period of 5 or more days in the aggregate during any calendar year and which is not the person's permanent address or, for a person whose permanent residence is not in this state, a place where the person is employed, practices a vocation, or is enrolled as a student for any period of time in this state." Basis above, it can be inferred that a temporary residence does not include a place where the person is enrolled as a student for any period of time. The Applicant wishes to submit that the students stay in the hos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reside at any other place where he had gone on a casual or temporary visit. But if he has not established home, his actual and physical habitation is the place where he actually or personally resides." 2.4.2 Based on the above, it can be inferred that 'residence' is of a permanent nature i.e. when a person resides at a place for a considerable period of time, it is considered as 'residence'. A place where someone casually or temporarily visits cannot be termed as residence. 2.4.3 Drawing inference from the above definition, a considerable period of time could be understood as a place where one intends to stay for a long term and not just temporary. In the case of the Appellant, since the students come to stay in the hostel for undergoing professional or educational courses, thus their period of stay cannot be considered as temporary. Thus, such hostels are used for residence by the students. Accordingly, the third condition required to be satisfied for the applicability of Serial Number 12 of the Exemption Notification is satisfied in the case of the Applicant. 2.4.4 Further, it is held that the Accommodation services provided by the Hostels are exempt under Sr. No 12 of the Not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cable and necessary 4. HEARING Preliminary hearing in the matter was held on 09.05.2024. Mr. Nitin Shah, Advocate appeared and requested for admission of the application. Jurisdictional Officer Mr. M.A. Bhagat, Deputy Commissioner of State Tax Also appeared. The application was admitted and called for final hearing on 26.06.2024. Mr. Nitin Shah, Advocate, Authorized Representative of the applicant, appeared made oral and written submissions. Jurisdictional Officer Mr. M.A. Bhagat, Deputy Commissioner of State Tax Also appeared. We heard both the sides. 5. FINDING OBSERVATIONS AND DISCUSSION: Uncontroverted material facts necessary to answer the question are as under, 5.1 The applicant is providing accommodation services in hostel run by the society and such services are provided only to the students studying in 11th Standard up to Graduation, only. 5.2 Duration of stay in hostel is for academic year is for 10 months i.e. from June to March and for vacation period duration of stay is a month or two on monthly basis. 5.3 Accommodation services are provided to the students on sharing basis with common amenities fees are charged for 10-month periods at Rs. 1,10,000/- and for va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he facts of this and those facts of the case and questions raised before Hon'ble Madras High court in in Case of Thai Mookambikaa Ladies Hostel (Supra) are similar. a. In that case the Petitioner had filed an application for Advance Ruling before the Advance Ruling Authority, Tamil Nadu under provisions of the Tamil Nadu Goods and services Act, 2017. Facts stated in the decision of the Authority in brief are as under, "6.3. The facts of the case as stated by the Applicant are that - - The Applicant are running ladies hostel providing boarding and lodging facilities to students and working women. They are also providing certain ancillary services such as housekeeping, security arrangements, Television, parking facility etc. - charges of Rs. 5300/ is being collected per inmate per month for providing all the above facilities including electricity charges; the charges collected are per bed charges and these charges are also dependent on number of persons sharing the room; the invoices to the habitants are raised accordingly. - the premises used for providing these services are owned by the Applicant. 6.4. The Applicant claims that the immovable property being used for pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court in case of Taghar Vasudeva Ambrish (Supra) has observed as under: "13. It is noteworthy that the accommodation which is used for the purposes of the hostel of students and working women is classified in residential category in the Revised Master Plan 2015 of Bangalore City. The Supreme Court in KISHORE CHANDRA SINGH VS BABU GANESH PRASAD BHAGAT AIR 1954 SC 316 has held that expression residence only connotes that a person eats, drinks and sleeps at that place and it is not necessary that he should own it. The aforesaid decision was referred to by Bombay High Court in BANDU RAVJI NIKAM SUPRA. The hostel is used by the students for the purposes of residence. The students use the hostel for sleeping, eating and for the purpose of studies for a period ranging between 3 months to 12 months. In the hostels, the duration of stay is more as compared to hotel in guest house, club etc." (Emphasis supplied) 56. Ultimately, the Authorities have to look into the aspect as to whether the particular place is a dwelling unit or not When such being the case, since the hostellers are staying in the room for months together, it cannot be construed as non-residential unit and certai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gree level. The society is not running any educational Institute. It has 82 rooms housing 298 Students. The rooms are 2seated, 4 seated, 8 seated, 40 seated and hostel is ground +2 story building. The applicant is registered under GST Act having GSTIN 27AAATM1635P2Z8 with effect from 18/06/2023 and filling under Centre Jurisdiction (CBIC), (PUNE), (PUNE-II), (Division III DECCAN, (RANGE-III). The Students are allotted rooms for a period of 10 months from July to April and for vacation course from May to June. The society is charging Rs. 1,35,000/- per month for each student. After every 10 months the students have to vacate the rooms and rooms are re-allotted, thus the stay in hostel is temporary. The rooms of the hostel have bed and cupboard. The hostel has library and mess facility. The Maharashtra Jain Education society is a trust and as per Circular No. 32/06/2018-GST dated 12/02/2018 Sr. No. 1-the hostel accommodation services do not fall within the ambit of charitable activities as defined in notification No. 12/2017-CT (Rate). In advance ruling in case of Student's welfare Association decided on 29/02/2018 the hostel accommodation provided by trusts to students is not exe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el Accommodation with supply of Food are mixed supplies and not eligible to benefits of Entry at Sr No 12 of the Exemption Notification. c. Now coming the decision of High Courts relied upon by petitioners and its binding precedent on us also needs to be decided. From the judgment of Hon'ble Bombay High Court in case of Commissioner of Income-Tax vs Thana Electricity Supply Ltd decided on 22 April, 1993 published in [1994) 206 ITR 727 (BOM)-it is very clear that these judgments are not binding on Authorities situated in non-jurisdictional area. Refer para 22 of the judgment- 21. From the foregoing discussion, the following propositions emerge; (d) The decision of one High Court is neither binding precedent for another High Court neither courts or Tribunals outside its own territorial jurisdiction. It is well settled that the decision of a High Court will have the force of binding precedent only in the State or territories on which the court has jurisdiction. In other States or outside the territorial jurisdiction of that High Court it may, at best, have only persuasive effect. By no amount of stretching of the doctrine of stare decisis, can judgments of one High Court be gi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing knowledge of any binding judgment of Bombay High Court or Supreme Court, we have no hesitation in following the decision of Hon'ble Madras High court in case of Thai Mookambikaa Ladies Hostel (Supra) - in deciding that Supply of hostel accommodation services to students with mandatory supply of meals and other necessary amenities, for duration of stay of 10 months-is covered by the Entry at Sr No 12 of Notification 12/2017-Central tax (Rate) dated 28th June 2017 and exempted from tax. 5.8 Supply of hostel accommodation services to students with mandatory supply of meals and other necessary amenities, for duration of stay of 1 to 2 months during vacation period to new students. Duration of stay of only 3 to 12 months are decided to be exempted from tax by the aforesaid judgments. Duration of stay less than 3 months is not decided in those judgments. 5.8.1 Submission of the Applicant-The facts of this and those facts of the case and questions raised before Hon'ble Madras High court in in Case of Thai Mookambikaa Ladies Hostel (Supra) are similar and hence for shorter duration of stay is also covered in exemption notification. It is submitted that as per definition in Law Insid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iod having tenure of 1 of 2 months that is not for months together cannot be treated as residence purpose for the entry no 12 of exemption notification 12 such duration can be at the best described as temporary accommodation. c. This inference is also supported by judgment Hon'ble Supreme Court in the case of Jeewanti Pandey Vs Kishan Chandra Pandey decided on 20-10-1981 [Citation 1981 SCC (4) 517] wherein the Apex Court observed that: "In its ordinary sense 'residence' is more or less of a permanent character. The expression 'resides' means to make an abode for a considerable time; to dwell permanently or for a length of time; to have a settled abode for a time. It is the place where a person has a fixed home or abode. In Webster's Dictionary, 'to reside' has been defined as meaning 'to dwell permanently or for any length at time', and words like 'dwelling place' or 'abode' are held to be synonymous. Where there is such fixed home or such abode at one place the person cannot be said to reside at any other place where he had gone on a casual or temporary visit, e.g. for health or business or for a change. If a person lives with his wife and children, in an established home, his ..... X X X X Extracts X X X X X X X X Extracts X X X X
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