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TMI Blog2024 (10) TMI 192X X X X Extracts X X X X X X X X Extracts X X X X ..... renting of premises arranged at premises other than 'specified premises' - GST is payable against whole consideration of the composite supply @ 5% without ITC subject to condition imposed. - DR TANISHA DUTTA AND JOYJIT BANIK, MEMBER Applicant s Representative Heard : Mr. Gopal Agarwal, Authorized Representative Mr. Satyanarayan Gupta, Authorized Representative. Preamble A person within the ambit of Section 100 (1) of the Central Goods and Services Tax Act, 2017 or West Bengal Goods and Services Tax Act, 2017 (hereinafter collectively called the GST Act ), if aggrieved by this Ruling, may appeal against it before the West Bengal Appellate Authority for Advance Ruling, constituted under Section 99 of the West Bengal Goods and Services Tax Act, 2017, within a period of thirty days from the date of communication of this Ruling, or within such further time as mentioned in the proviso to Section 100 (2) of the GST Act. Every such appeal shall be filed in accordance with Section 100 (3) of the GST Act and the Rules prescribed there under, and the Regulations prescribed by the West Bengal Authority for Advance Ruling Regulations, 2018. 1.1 At the outset, we would like to make it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g of premise, if the Room Tariff of the Club is declared Rs. 7,500 and above (i.e. specified premise) during the peak season. 1.4 An applicant desirous of obtaining an advance ruling is required to file an application on the common portal in FORM GST ARA-01 in respect of subject matter as specified in sub-section (2) of section 97 of the GST Act. The questions on which the advance ruling is sought for is found to be covered under clause (a), (b) and (e) of sub-section (2) of section 97 of the GST Act. 1.5 The applicant states that the questions as raised in the application have neither been decided nor are pending before any authority under any provision of the GST Act. 1.6 The officer concerned from the revenue has raised no objection to the admission of the application. 1.7 The application is, therefore, admitted. Submission of the Applicant 2.1 The applicant submits that it is one of the premier and elite clubs of Kolkata primarily engaged in providing Club or Association Services. In the course of business, the club also provides Short Term Accommodation, Restaurant, Catering services etc. The applicant provides standalone service of renting of premise to the members for carryi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvention center, club, pandal, shamiana or any other place, specially arranged for organising a function) provided by suppliers providing 'hotel accommodation' at 'specified premises', or suppliers located in 'specified premises'. 9 The expressions as used in the above mentioned entry have already been explained as follows vide Sl. No. 2 of the said schedule: 'Specified premises' means premises providing 'hotel accommodation' services having declared tariff of any unit of accommodation above seven thousand five hundred rupees per unit per day or equivalent. 'Outdoor catering' means supply, by way of or as part of any service, of goods, being food or any other article for human consumption or any drink, at Exhibition Halls, Events, Conferences, Marriage Halls and other outdoor or indoor functions that are event based and occasional in nature. 'Declared tariff means charges for all amenities provided in the unit of accommodation (given on rent for stay) like furniture, air conditioner, refrigerators or any other amenities, but without excluding any discount offered on the published charges for such unit. 2.3 Further, the applicant r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the applicant charges GST at the rate of 18% on the entire consideration received considering all the services as composite supply of Banquet services as it provides bundled services in form of Indoor catering along with Renting of Premises, Decorations, light Sound etc. 2.6 In regard to the query whether the composite supply of catering service within the club premises along with renting of premises can be construed as Outdoor Catering service along with Renting of Premise , the applicant has made following submission: The Term 'Outdoor catering' means supply, by way of or as part of any service, of goods, being food or any other article for human consumption or any drink, at Exhibition Halls, Events, Conferences, Marriage Halls and other outdoor or indoor functions that are event based and occasional in nature. In view of the aforesaid definition, supply of catering service within the club premises along with renting of premises to the members should also be classified as Outdoor Catering Service. Reliance can be placed on the Advance Ruling pronounced by AAR West Bengal in the case of Manoj Mittal [2021 (48) GSTL 197 (AAR GST WB)], wherein it was held that The term ' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 7,500/- per unit per day or equivalent. 2.8 The applicant further contends that in a scenario where the the club does not satisfy the definition of specified premise and the services of the club does not qualify as Composite Supply of service , the applicant can pay tax as a supplier of two separate services namely supply of Renting of Premises taxable @ 18% and supply of catering services taxable @5%. 2.9 In regard to the query whether the club is mandatorily required to pay GST @ 5% without ITC or the club has the option to charge GST @ 18% with ITC considering the fact that the club being engaged in rendering Accommodation Service may increase the Room Tariff to Rs. 7,500 and above (i.e. specified premise) during the peak season, the applicant submits as follows: Reliance is placed on the Karnataka AAR ruling in the matter of Coffee Day Global Limited [2018 (17) G.S.T.L. 121 (A.A.R. GST)], wherein the AAR held that the explanation in the services rate notification removed any kind of ambiguity on issue and thus, restaurant cannot seek to pay GST at 18% (instead of 5% without ITC) and claim ITC. Further, the right to avail ITC is not an absolute right and conditions and restric ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ff for the room, and GST at the rate so determined would be levied on the amount charged for restaurant services from the guest/customer. 2.12 In the view of the aforesaid clarification and the ruling, it can be said that the applicant shall be liable to pay GST @ 5% without ITC during the period when the declared tariff is less than Rs. 7,500/- and GST @18% with ITC during the period when the declared tariff is Rs. 7,500/- or above. Submission of the Revenue 3.1 The officer concerned from the revenue has not expressed any view in this regard. Observations Findings of the Authority 4.1 We have gone through the records of the issue as well as submissions made by the authorized representative of the applicant during the course of personal hearing. 4.2 The applicant submits that he provides banquet / lawn facility on rent along with catering services to their members. We first proceed to examine the issue whether such supply would be considered as composite supply of 'outdoor catering' together with renting of premises so as to attract tax @ 5% vide entry no 7(v) of the Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017, as amended. The term outdoor catering , accord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ices. The rule is If various elements of a bundled service are naturally bundled in the ordinary course of business, it shall be treated as provision of a single service which gives such bundle its essential character . Although it has been observed in the CBEC Education Guide that No straight jacket formula can be laid down to determine whether a service is naturally bundled in the ordinary course of business , such normal and frequent practices adopted in a business can be ascertained from several indicators which inter alia includes as follows: If a large number of service recipients of such bundle of services reasonable expect such services to be provided as a package, then such package could be treated as naturally bundled in the ordinary course of business. Majority of service providers in a particular area of business provide similar bundle of services. For example, bundle of catering on board and transport by air is a bundle offered by a majority of airlines. 4.4 The applicant contends that he provides the banquet services together with catering services in the ordinary course of business and therefore such supply would attract tax @ 5%. To decide the issue, we would like t ..... 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