Tax exemption denied for accommodation-based services at Nimba Nature Cure Village; not classified as health care.

The case involved the classification of services provided by M/s. Oswal Industries Ltd. operating Nimba Nature Cure Village for tax exemption eligibility. The services were found to be primarily accommodation-based, bundled with therapies, falling under Heading 9963 for room accommodation services, not under Heading 9993 for health care services. Consequently, the applicant was ruled ineligible for the exemption under Entry No.74 of Notification No.12/2017-Central Tax (Rate) dated 28.06.2017.

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Issues Involved:
1. Classification of services provided by the applicant.
2. Eligibility for exemption under Entry No.74 of Notification No.12/2017-Central Tax (Rate) dated 28.06.2017.

Issue-wise Detailed Analysis:

1. Classification of Services Provided by the Applicant:
The applicant, M/s. Oswal Industries Ltd., operates Nimba Nature Cure Village, offering wellness facilities such as Naturopathy, Ayurveda, Yoga and meditation, Physiotherapy, and Special therapy. They claim their services fall under Heading 9993 (human health and social care services) as per Notification No.11/2017-Central Tax (Rate) dated 28.06.2017. Specifically, they argue that their services fall under Sub-heading 999319, which includes "Other human health services including homeopathy, unani, ayurveda, naturopathy, acupuncture and the like."

Upon examination, it was found that the services provided by Nimba Nature Cure Village are strictly on a residential basis. The consideration for these services is primarily based on the type of room and occupancy, indicating that accommodation is a mandatory component of the service package. The packages offered include accommodation, food, and various therapies, which are naturally bundled and provided in conjunction with each other, making it a composite supply as defined under Section 2(30) of the CGST Act, 2017. The principal supply in this composite supply is the accommodation service, classified under Heading 9963 and specific heading 996311 (Room or unit accommodation services provided by Hotels, Inn, Guest House, Club and the like).

2. Eligibility for Exemption under Entry No.74 of Notification No.12/2017-Central Tax (Rate) dated 28.06.2017:
The applicant sought exemption under Entry No.74 of Notification No.12/2017-Central Tax (Rate) dated 28.06.2017, which exempts "health care services by a clinical establishment, an authorised medical practitioner or para-medics" classified under Heading 9993.

However, since the services provided by the applicant are classified under Sub-heading 996311 (accommodation services), they do not fall under Heading 9993. Therefore, the exemption under Entry No.74 is not applicable to the applicant.

Conclusion:
The services provided by M/s. Oswal Industries Ltd. (Nimba Nature Cure Village) are classified under Sub-heading 996311 (Room or unit accommodation services provided by Hotels, Inn, Guest House, Club and the like) and not under Heading 9993. Consequently, the applicant is not eligible for the exemption under Entry No.74 of Notification No.12/2017-Central Tax (Rate) dated 28.06.2017.

Ruling:
The applicant M/s. Oswal Industries Ltd. (M/s. Nimba Nature Cure Village) is not eligible to get the benefit of entry No.74 of exemption Notification No.12/2017-Central Tax (Rate) dated 28.06.2017.

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