AI Drafter 
TaxTMI 
TaxTMI 
2022 (5) TMI 407
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....s 'the appellant') against the Advance Ruling 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 refer....
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....nt filed an application before the Rajasthan Authority for Advance Ruling (AAR) to seek an Advance Ruling "Whether Hostel 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 ....
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....low one thousand rupees per day or equivalent. Nil Nil 6.1.3 Section 15 (1) provides the 'Value of Supply' as below:- "15. (1) The value of a supply of goods or services 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....
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....stration.- Where goods are packed and transported with insurance, the supply of goods, packing materials, transport and insurance is a composite supply and supply of goods is a principal supply; Section 2(74) of the CGST Act, 2017 defines '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 "....
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....ion Service is provided inside the Campus of an Education Institution, which is located in a remote village with restricted movement of students for their own security - In this case the students and their parents come with a standard expectation, that the Meals (F&B) will be part of the Hostel Accommodation Service, which cannot 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....
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....ply of that particular supply which attracts the highest rate of tax." As provided in Section 8 of the CGST Act, 2017, in case of 'Composite Supply' the entire package including supply of ancillary services [Meals (F&B) including Breakfast, Lunch and Dinner], shall be treated as a supply of principal service only, which in the current case is Hostel Accommodation. The combined fees charged from 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 Headi....
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....) including breakfast, lunch and dinner, and this service is an essential element of the package; iii) In order to practically use the hostel accommodation service at the campus, the ancillary service of Meals (F&B) including Breakfast, Lunch and Dinner are inseparable from the main service; iv) Both Hostel Accommodation and Meals (F&B) are offered as a package by MEF to the students of MUST and the fees is charged for the entire package, irrespective 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 ....
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....ype of 'Hostel Seat' opted by the student of MUST. Single occupancy and double occupancy (AC/Non AC) Hostel Seats are being offered by appellant for the students of MUST. Appellant filed an application before the Rajasthan Authority for Advance Ruling (AAR) to seek an Advance Ruling "Whether Hostel 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?" 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 pro....
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....iew of the discussion of above paras 8.4 and 8.5, we are of the view that supply of food with Hostel Accommodation service is not naturally bundled in normal course of business. It has been also informed by the appellant that a cafeteria (canteen) has been provided for day scholars, in which they can optionally take snacks and F&B as per their choice. The above said facts itself proves that food service is an independent service and can be supplied separately in the appellants own case. It is obvious that a person can live in the hostel without availing 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 t....