TaxTMI 
TaxTMI 
2022 (6) TMI 1167
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.... Gurkripa Career Education Private Limited, Plot No. 60, Jyoti Nagar, Samrathpura, Piprali Road, Sikar-332001, Rajasthan (hereinafter the applicant) is fit to pronounce advance ruling as it falls under the ambit of the Section 97(2) (b) & (e) given as under: - (b) Applicability of a notification issued under the provisions of this act; (e) Determination of liability to pay tax on any services; Further, the applicant being a registered person (GSTIN is 08AAHCG0218N1ZI as per the declaration given by him in Form ARA-01) the issue raised by the applicant is neither pending for proceedings nor proceedings were passed by any authority. Based on the above observations, the applicant admitted to pronounce advance ruling. A. SUBMISSION OF THE APPLICANT:(in brief) * M/s Gurkripa Career Education Private Limited (hereinafter referred to as "applicant") a private limited company bearing GSTIN 08AAHCG0218N1ZI in the state of Rajasthan, is engaged in imparting commercial coaching service in the field of science stream to the students inspiring to clear medical and engineering entrance examinations like NEET, JEE etc. and provides the best facilities to the students in....
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....* That the hostel facility provided by the applicant to students is optional facility. Further, the hostel fees are not included in the training/coaching fees collected from the students. In fact, the hostel fees are not a part of any package of commercial training and coaching services rendered by the applicant. * That the separate consideration is charged for providing hostel facility to the students. The hostel provides basic residential facilities which include well-maintained residence, Light, water, etc. * That the hotel charged a lump sum consideration for all the services amount of Rs. 1,02,000/- per year per student i.e., Rs. 279/- (Approx.) per day. * The contention of the applicant is that the above services to be treated as composite supply as defined under section 2(30) of the CGST Act. Following provisions of CGST Act should be discussed hereunder. * For such supplies CGST Act specifically provides as under:- * Section-2(30) "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....
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....he applicant, it is clear that applicant is providing hostel facility to the students with various facilities like food supply, light, water etc. All the facilities are only for the occupants of the hostels. Further since in this supply, all the supplies are made as a package with the accommodation service being the principal supply, the entire supply would be treated as a composite supply of accommodation service as per section 8 of the CGST Act, 2017. * In this regards it is submitted that primarily the students approach the Hostel facility providers for having accommodation facility and the allied facilities acts as a incentive to choose the given hostel. Here in the applicant case, no other charges are being collected from the occupants for the allied services being provided and single consideration is charged from the students against the facility of accommodation. Therefore, hostel service provided by the applicant is to be treated as "Composite Supply" as defined under Section 2(30) of the CGST Act. * That the applicant is of the understanding that services of hostel facility to the student wherein consideration charged from student much less than Rs. 1000/- per day pe....
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....ies." As per Oxford Learner Hostel is "a building that provides meals and a cheap place to stay to students, workers, or travelers" In Common Parlance: A hostel is an establishment which provide inexpensive food and lodging for a specific group of people. such as students, workers, or travellers. The word Hostel can also be used as synonyms of Cheap Hostel, Youth Hostel, bed and breakfast, boarding house, guest house etc. Form the above definitions it can be perceived that the hostel is meant for residential and lodging purpose or can also be interpreted as guest house, inn for the purpose of staying with amnesties. Meaning of Hotel As per Oxford Learners Hotel means "a building where people stay, usually for a short time, paying for their rooms and meals." As per Cambridge dictionary Hotel means "a building where you pay to have a room to sleep in, and where you can sometimes eat meals." Meaning of Club As per Oxford Learners Club means "an organization for people who share an interest or do a sport or activity together." As per Cambridge dictionary Club means "an organization of people with a common purpose or interest, who meet regularly and take part ....
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....18-GST, dated 12-2-2018 issued by CBIC. Relevant extract is as under: S.No. Issue Clarification 1 Is hostel accommodation provided by Trusts to students covered within the definition of Charitable Activities and thus, exempt under SI. No. 1 of Notification No. 12/2017-CT (Rate). Hostel accommodation services do not fall within the ambit of charitable activities as defined in para 2 (r) of notification No.12/2017-CT(Rate). However, 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 are exempt. Thus, accommodation service in hostels including by Trusts having declared tariff below one thousand rupees per day is exempt. 1S1. No. 14 of notification No. 12/2017-CT(Rate) refers] * As per circular No, 32/06/2018-GST, dated 12-02-2018 issued by Ministry of Finance (Department of Revenue), Govt. of India, services by a hostel, 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 o....
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....one thousand rupees per day. Therefore, the scope of the entry is restricted to use of the accommodation unit for residential and lodging purpose only. 5.1 5 The contention of Jurisdictional Officer, stating that the subject activity is taxable is not acceptable. The applicant is providing hostel on the rent to various students where fees charged per student per day per room is much less than Rs. 1000/- per day per person. Therefore, considering the provisions of Notification Entry No. 14, and clarification given by CBIC in circular No. 32/06/2018-GST dated 12^th February 2018, it is held that, the applicant's activity is satisfying the conditions of Entry Sr.no. 14 of said Notification and hence would be exempt from taxes. 5.16 It is pertinent to mention at this juncture that, the applicant in both the oral and written submissions has stated that the hostel stay for the students is optional. Further, the applicant has also mentioned that the stay in hostel being optional to the students, the hostel fees are not included in the training/coaching fees collected from the students. In fact, the hostel fees are not a part of" any package concerning commercial trai....
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....different treatment would be required for use of hostel rooms given by us for residential purposes but ultimately been used by the hirer for commercial use. Answer: The clarification issued vide Circular No. 32/06/2018-GST dated 12^th February2018, we find that the distinction between services by a hotel, inn guest house club or composite, by whatever name called, for residential or lodging purposes and Hostel accommodation service is done away. In the present case applicant submits that during the vacation period hostel is offered for residential purpose and hired for labourers of a commercial organization. We may now refer to entry Sr. No. 14 of the Notification no. 12/2017 to ascertain whether different treatment would be required for use of hostel rooms given for residential purposes and commercial purposes. S.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 er da or e....
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....es of SAC 9963 provided by such a supplier having a declared tariff of less than Rs. 1000-00 per day or equivalent would be exempt. Further since in this supply, all the supplies are made as a package with the accommodation service being the principal supply, the entire supply would be treated as a composite supply of accommodation service as per Section 8 of the CGST Act, 2017. Hence, the proposed supply of services in question by the applicant would not be liable to tax as per Entry No. 14 of the Notification No. 12/2017-Central Tax (Rate), dated 28-6-2017 as amended from time to time." * In view of the above rulings, it is clear that, CBEC has considered both hostel and hotel are one and the same and accordingly concluded that the exemption under Sr. No. 14 of Notification No 1272017-C.T. (Rate) dated 28.06.2017 is also available to hostels in view of CBEC Circular No.32/06/2018-GST dated 12th February. 2018. * It is also pertinent to mention at this juncture that. the hostel facility provided by the applicant to students is optional. Further. the hostel fees are not included in the training/coaching, fees collected from the students. In fact. the hostel fees are not a par....
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....ities for students. E. FINDINGS, ANALYSIS & CONCLUSION: 1. We have perused the records on file and gone through the facts of the case and the submissions made by the applicant as well as the department. On the basis of submission made, we arc of the view that the applicant i.e Gurkripa Career Education Private Limited (GSTIN 08AAHCG0218N1ZI) is engaged in imparting commercial coaching service in the field of science stream to the students inspiring to clear medical and engineering entrance examinations like NEET. JEE etc. and intends to provide hostel facility not only to the students who are enrolled with the applicant for coaching service but also to the students of nearby schools/educational institutions. 2. Based on the submission made by the jurisdictional officer, we observe that Applicant is running hostel in the name of 'M/s Gurkripa Career Education Hostel' for residential facilities. A separate consideration is charged for providing such hostel facility to the students and hostel fees are not part of package of commercial coaching service. 3. The applicant in their written submission stated that they wishes to charge a consolidated amount of Rs. 1,02,0....
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....per day per student in course of business, the activity falls under the definition of supply. 7.2 Concept of 'composite supply' under Section 2(30) of GST Act, 2017 defines 'composite supply' as under: "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: In view of above, we find that essential components of a composite supply are as under- -two or more taxable supplies; -services should be naturally bundled; -supplied in ordinary course of business; - one of the supply out of whole should be a principal supply. 7.3 Mixed Supply has been defined in Section 2(74) of GST Act, 2017 as below- (74) "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. Illustrati....
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....sidential or lodging purposes, having declared tariff of a unit of accommodation below one thousand rupees per day or equivalent are exempt. Thus, accommodation service in hostels including by Trusts having declared tariff below one thousand rupees per day is exempt. 1S1. No. 14 of notification No. 12/2017-CT(Rate) refers] 8. In view of aforesaid legal provisions, in order to examine the applicability of exemption/ taxability, there should be documentary evidences which support the contention of the applicant. In the instant case, documentary evidence like rent/lease agreement of the premises and License from the Local authority in respect of Hostel are keenly required. Further, Brochure mentioning thereunder the facilities / services which to be provided to the occupants of the said Hostel and Break up of fees to be charged from the occupants is also required to decide whether it is accommodation & lodging service or otherwise. Moreover, we find that the services to be supplied in the present case are more than two but in the absence of Brochure of Hostel facilities, Break-up of fees in respect of facilities/services to be provided, License from the Local Authority, Details of ....