TaxTMI 
TaxTMI 
2022 (5) TMI 407
X X X X Extracts X X X X
X X X X Extracts X X X X
....ing No. RAJ/AAR/2021-22/02 dated 07.07.2021 BRIEF FACTS OF THE CASE 3. M/s Mody Education Foundation, NH 11, Lakshmangarh, Sikar - 332311 (herein after referred as (MEF/Appellant) has filed appeal against Ruling issued by Authority for Advance Ruling Rajasthan vide order No. RAJ/AAR/2001-22/02 dated 07.07.2021. The Appellant has submitted appeal in this office in hard copy and also enclosed acknowledgement in respect of e-filing of appeal on 06.08.2021 on online common portal. Fee of CGST Rs. 10000/- and SGST Rs 10000/- have been paid vide Challan dated 06.08.2021. Brief facts of the case are as under:- 3.1 The Appellant is a Society registered under Societies registration Act, 1860 with Registration No. S-10560/. The Appellant is registered as a Public Charitable Trust u/s 12AA of the Income Tax Act, 1961 having registration no. DLI(C)(I-1178). The Appellant is running a CBSE affiliated school from class 3rd to 12th at NH-11, Lakshmangarh, Distt. Sikar (Rajasthan)-332311 and registered under GST law having GSTIN 08AABTM0215E1Z5. The appellant is also the sponsoring body of Mody University of Science & Technology (hereinafter referred as MUST). Appellant is considering a proposa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....facility which includes Lodging and Boarding service provided by appellant to the students of MUST having value of service upto Rs.1000/- per day would be eligible for exemption under entry no. 14 of the notification 12/2017 CTR Dt. 28-06-2017?" 5. Rajasthan Authority for Advance Ruling (AAR) has observed that the Service provided by appellant to students of MUST is a mixed supply under section 2 (74) and not a composite supply under Section 2 (30). Further AAR has considered 'Room as a 'Unit of Accommodation' for exemption upto Rs.1000/- per day and passed Ruling that the applicant would not be eligible for exemption under entry no. 14 of the Notification No. 12/2017 Central Tax (Rate), dated 28.06.2017. 6. Aggrieved by the ruling the appellant filed present appeal before this forum on 06.08.2021 on online portal and in hardcopy on 09.08.2021 on following grounds: 6.1 Appellant submitted that Advance Ruling No. RAJ/AAR/2021-22/02 dated 07/07/2021, is bad in law, as well as on the facts of the Case. Legal Provisions and Clarifications related to Hostel Accommodation Service and its natural bundling with the serving of Meals (F&B) to students, in the ordinary course of business, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ices or both shall be the transaction value, which is the price actually paid or payable for the said supply of goods or services or both where the supplier and the recipient of the supply are not related and the price is the sole consideration for the supply." In the current case the total package fees charged from the students as 'Boarding and Lodging Charges' should be treated as the Value of Supply, which is less than Rs. 1000/- per day for a 'Unit of Accommodation'. 6.1.4 The appellant submitted that in this case, the Unit of Accommodation is a 'Hostel Seat', whereas the Hon'ble bench of the AAR in Para 9 of the Advance Ruling has considered a 'Room' as the Unit of Accommodation. Following illustrations has been submitted by the appellant to understand the issue of 'Unit of Accommodation': - a) In case of Dharamshala's, single bed accommodation is being offered to 10 persons in a Dormitory (i.e. a Room) for Rs.150/- per night. In this case the total collection from the room shall be Rs.1500/- per night on full occupancy, but the same is considered as exempt under S. No. 14 of the Notification No. 12/2017 - CT (Tax) dated 28/06/2017; b) In case of Suit Room of a Hotel, co....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Mixed Supply' as below:- "mixed supply" means two or more individual supplies of goods or services, or any combination thereof, made in conjunction with each other by a taxable person for a single price where such supply does not constitute a composite supply. Illustration.- A supply of a package consisting of canned foods, sweets, chocolates, cakes, dry fruits, aerated drinks and fruit juices when supplied for a single price is a mixed supply. Each of these items can be supplied separately and is not dependent on any other. It shall not be a mixed supply if these items are supplied separately; 6.1.7 Appellant submitted following clarification on Natural Bundling of Meals (F&B) provided as part of the Package along with Hostel Accommodation Service in the ordinary course of business The concept of services which are naturally bundled in the ordinary course of business, has been dealt in detail by the CBEC in its "Taxation of Services: An Education Guide" dated 20/06/2012. The relevant extract of the Education Guide is produced hereunder- "9.2.1 Services which are naturally bundled in the ordinary course of business The rule is - 'If various elements of a bundled servic....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ot be separated from the main service. 2. 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 In all Education Institutions and Hostels operated by Trusts, in a remote location especially for Girl Students (as in the case of Applicant), meals are part of the Hostel Accommodation and they cannot be separated from one another. 3. The nature of the various services in a bundle of services will also help in determining whether the services are bundled in the ordinary course of business. If the nature of services is such that one of the services is the main service and the other services combined with such service are in the nature of incidental or ancillary services which help in better enjoyment of a main service. For example service of stay in a hotel is often combined with a service or laundering of 3-4 Items of clothing free of cost per day. Such service is an ancillary service to the provision of hotel accommodation and the resultant package would be treated as services naturally bundled in the ordinary course of business. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rom the students for Hostel Accommodation is less than Rs.1000/- per day, therefore, the same is exempted under S. No. 14 of the Notification No. 12/2017. 6.2 Appellant submitted that Jurisdictional Officer (Superintendent CGST Range -XXXI, Sikar Rajasthan), has given his comments as below:- "Whether Hostel facility which includes Lodging and Boarding service provided by MEF to the students of MUST having value of service upto Rs.1000/- per day would be eligible for exemption under entry no. 14 of the notification 12/2017 CTR Dt 28-06-2017?" Entry No. 14 of the Notification 12/2017 Central Tax (Rate) dated 28.06.2017, is produced verbatim:- SI.No. Chapter, Section, Heading, Group or Service Code (Tariff) Description of Services Rate (per cent.) Condition 14 Heading 9963 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. Nil Nil Thus service of accommodation having declared tariff of a unit below one thousand rupees is charged at Nil rate in GST. Now, the point is that the accommodation services provided ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pective of the quantum or amount of each service in the package that the students actually use or receive; v) The entire fees of Hostel Accommodation including Meals (F&B) are advertised as a single package and there is no bifurcation of charges for Accommodation and Meals in the package. vi) MEF is offering the ancillary service of serving Meals (F&B), exclusively to facilitate the main service of hostel accommodation and these ancillary services are otherwise not available separately for any other purpose. 6.4 The appellant placed reliance on the following, Advance Rulings in this matter:- (i) Srisai Luxurious Stay LLP (Karnataka AAR GST) Advance Ruling No. KAR ADRG 20/2020 dated 31/03/2020 (ii) M/s. Logic Management Training Institutes Pvt. Ltd. (Kerela AAR GST) Advance Ruling No. KER/76/2019 Dated 20.05.2020 (iii) M/s. Ramnath Bhimsen Charitable Trust (Chhattisgarh AAR GST) Order No. STC/AAR/ 11/2018 dated 02/03/2019 PERSONAL HEARING 7. A virtual hearing in the matter was held on 14.09.2021. Sh. Ritul Patwa, Authorized Representative of the appellant has attended hearing on 14.09.2021. They reiterated the submissions already made under grounds of appeal. During the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....12/2017 CTR Dt 28-06-2017?" 8.3 Rajasthan Authority for Advance Ruling (AAR) has observed that the Service provided by appellant to students of MUST is a mixed supply under section 2 (74) and not a composite supply under Section 2 (30). Further AAR has considered 'Room' as a 'Unit of Accommodation' for exemption upto Rs.1000/- per day and passed Ruling that the applicant would not be eligible for exemption under entry no. 14 of the Notification No. 12/2017 Central Tax (Rate), dated 28.06.2017. Aggrieved by the ruling the appellant filed present appeal before this forum. 8.4 Before examining the contention of the appellant it is imperative to go through the relevant provision of the CGST Act which defines the term Composite supply and Mixed supply. We find that as per Section 2(30) of CGST Act, 2017 "composite supply" means a supply made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both, or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply; Illustration. - Where goods are packed and transported with insuranc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....iling other service like food but to make ones stay more comfortable, the said ancillary services are availed by him. We find that the Rajasthan Authority for Advance Ruling has held that naturally bundled services are those services wherein one of the services is the main service and the other services combined with such service are in the nature of incidental or ancillary services which help in better enjoyment of a main service. If current nature of supply of services is tested based on above factors, it can be ascertained that the provision of hostel accommodation could be a principal supply but ancillary service food cannot be said to arise naturally with the principal service of hostel accommodation and therefore are not bundled naturally with principal supply. We find that in the present case, others services being provided by the Appellant are not naturally bundled or ancillary to Hostel service as the inhabitants of Hostel seats can avail these services from any other source. In fact the inhabitants have been restricted from sourcing these other services from any other person. Consequently, the inhabitants have to avail these services from the Appellant. In such situations....