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of <h1>Hostel accommodation services don't qualify for GST exemption under residential dwelling provisions, taxable at 18%</h1> <h3>IN RE : Tvl. Kurinji Womens Hostel 1</h3> IN RE : Tvl. Kurinji Womens Hostel 1 - TMI Issues Involved:1. Eligibility for GST exemption for hostel accommodation under Entry 12 of Exemption Notification No. 12/2017-CT (Rate).2. Requirement for GST registration based on turnover.3. Taxability and tariff heading for hostel accommodation services.4. Tax treatment of in-house food supply as part of a composite supply.5. Scope of ruling under Section 97(2) of the GST Act.Issue-wise Detailed Analysis:1. Eligibility for GST Exemption for Hostel Accommodation:The primary question was whether the hostel accommodation provided by the applicant qualifies for GST exemption under Entry 12 of Exemption Notification No. 12/2017-CT (Rate) and the identical TNGST Act notification. The relevant entry exempts 'services by way of renting of residential dwelling for use as residence.' The judgment clarified that the term 'residential dwelling' is not defined under the CGST Act, but under normal trade parlance, it refers to a place used as a home, not including temporary accommodations like hostels. The ruling emphasized that the applicant's hostel services, which include amenities like food and housekeeping, do not qualify as 'residential dwelling' for use as residence. Therefore, the services provided by the applicant are not eligible for the exemption.2. Requirement for GST Registration:The applicant is required to register for GST if their aggregate turnover exceeds twenty lakh rupees in a financial year. The ruling stated that the applicant's hostel services constitute a 'supply' under Section 7(1)(a) of the CGST Act, which mandates registration if the turnover threshold is met.3. Taxability and Tariff Heading for Hostel Accommodation Services:The judgment determined that the hostel accommodation services fall under Tariff heading 9963, which is categorized under 'Accommodation, food and beverage services.' These services are taxable at 9% CGST and 9% SGST, as per Sl.No. 7(vi) of Notification No. 11/2017, Central Tax (Rate), as amended by Notification No. 20/2019.4. Tax Treatment of In-house Food Supply as Part of a Composite Supply:The applicant provides in-house food along with accommodation, which is considered a composite supply. The principal supply is the hostel accommodation, which is taxable at 18%. Therefore, the composite supply, including food services, is also taxable at 18% as per Section 8 of the CGST Act.5. Scope of Ruling under Section 97(2) of the GST Act:The fifth question raised by the applicant did not fall within the scope of Section 97(2) of the GST Act, and hence, no ruling was issued on this question.Ruling Summary:1. The hostel accommodation services provided by the applicant are not exempt from GST under the specified notifications.2. The applicant must register for GST if their turnover exceeds the specified threshold.3. The hostel accommodation services are taxable at 18% (9% CGST + 9% SGST) under the specified tariff heading.4. The in-house food supply is part of a composite supply, taxable at 18%.5. No ruling was provided for the fifth question as it was outside the scope of the Act.
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