2020 (6) TMI 769

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....t would be mentioned as being under the GST Act. 3. Brief Facts of the case: M/s. Aluri Krishna Prasad is a property owner having multiple properties leased to various tenants and registered as a service provider under (GST regulations since its introduction in 2017, and prior to that under the erstwhile Service Tax rules. During 2015-16, the applicant constructed a five-story residential hostel building in Poranki village, Penamaluru Mandal, Krishna district in R.S. No. 189/2B in an area of two acres. The five-storied building consists of 170 hostel rooms having 34 rooms in each floor. Each room size is 17 feet wide x 22 feet depth measuring about 375 sq.ft each and contains an individual toilet and a bathroom with in each room along with a wash basin and accommodates five persons with provision to store their belongings in their individual shelves. All these 170 small hostel rooms are designed and built exclusively for housing purpose only and cannot be used for any other purpose. The applicant obtained the building construction permit from the relevant authority APCRDA vide RC No 2275/2014 dt.10.3.2015 as a Residential Hostel building. The premises possess its own sewerage tr....

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....Notification No.12/2017- Central Tax (Rate) dated 28.06.2017 as amended upto 25.01.2018? 2. Whether amount received for leasing residential hostel rooms is exempt under Sl.No.12 (Heading 9963) of Notification No.12/2017- Central Tax (Rate) dated 28.06.2017 as amended upto 25.01.2018? On Verification of basic information of the applicant, it is observed that the applicant falls under Central jurisdiction, i.e. Superintendent, Benz circle Range, Vijayawada CGST Division. Accordingly, the application has been forwarded 10 the jurisdictional officers and a copy marked to the State. tax authorities to offer their remarks as per the Sec. 98(1) of CGST /APGST Act 2017. In response, remarks are received from the jurisdictional officers concerned stating that no proceedings are lying pending or passed relating to the applicant on the issue, for which the Advance Ruling sought by the applicant. 5. Applicant's Interpretation of Law and Facts: The Central/State/Integrated/UT Good and Services Tax did not define the word "Hostel". Same is the case with the General Clauses Act, 1897. However, Circular No. 354/17/2018-TRU dt.12.2.2018 clarifies about hostel accommodation and equates it ....

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....t. When taken this as a metric, the daily charge per bed in the applicant's room with five beds comes to just Rs. 39/-. Hence the applicant is eligible for claiming exemption under Sl. No. 14 of notification No. 12/2017-CT (Rate) as concurred by the Authority for Advance Ruling of Maharashtra as well as that of Chhattisgarh. The applicant also seeks exemption under Sl. No. 12 of the Exemption Notification. Applicability of Sl.No. 12 of the Exemption Notification depends upon whether the dwelling unit is used as residence, irrespective of whether they are let out to individuals or a commercial entity. The rooms leased to the tenant M/s. Nspira Management Services Pvt. Ltd can only be used as a residential accommodation with provision of bathroom and toilet in each unit. These rooms cannot be used for no other purpose except housing. The building construction permit, final occupation certificate substantiates the applicant's statement. The applicant also made reference to an Advance ruling issued for M/s. Borbheta Estate Pvt Ltd, Kolkata, by the West Bengal Authority for Advance Ruling vide its order no. 13A/WBAAR/2019-20 dated 27.6.2019, which considered that when dwelling....

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.... of assistance with management of educational institutions and providing educational allied management services to its respective customers including Narayana Group of Schools spread in the states of Andhra Pradesh, Telangana etc., and other parts of India. The applicant proclaims himself as a service provider extending the hostel accommodation services to the students, a claim which is far from reality. It is the Lessee, that extends the Hostel accommodation services to M/s. Narayana Educational Society, which in turn uses it to accommodate its students for the academic year or so. Initially, we take up the first claim of the applicant i.e, Whether the amount received for leasing residential hostel rooms is exempt under Sl.No.14 (Heading 9963) of Notification Central Tax (Rate) dated 28.06.2017 as amended upto 25.01.2018? Sl. No. 14 of Heading 9963 describes "Services by a hotel, inn, guest house, club or campsite, by whatever name called, for residential or lodging purposes, having declared tariff of a unit of accommodation below one thousand rupees per day or equivalent" as nil rated' In this regard, the applicant, who is the service provider, does not satisfy the above ....