TaxTMI 
TaxTMI 
2024 (5) TMI 1029
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....s collected for lodging per student or per inmate is Rs. 1500/-. They provide single room occupation, or double room sharing or dormitory style of accommodation and rates vary accordingly. 2.3 The applicant's interpretation of law/facts in respect of the questions raised, they submitted the following that - • They have licence to run the residential hostel for boarding and lodging under Section 5 of the Tamilnadu Hostels and Home for Women and Children (Regulation) Act, 2014 [hereinafter referred to as the "Hostel Regulation Act"]. • Section 2(e) of the 'Hostels Regulation Act' defines "Hostel" or "Lodging House" to mean 'a building in which accommodation is provided for women or children or both either with boarding or not/The term 'Home for Women & Children" is defined in Section 2(d) to mean 'an institution, by whatever name called, established or maintained or intended to be established or maintained for the reception, care, protection for welfare of women or children or both; On the other hand, the term 'residential hotel' is defined in Section 2(14) of the Tamilnadu Shops & Establishments Act, 1947 to mean 'any premises in which business is carrie....
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....dence and to such renting is on his own account and not that of the proprietorship concern." • Thus, the inserted Explanation qualified only occupants/inmates who are registered persons for the purpose of reverse charge and the position remained the same when inmates were unregistered persons; Thus, in the case of the applicant herein, the occupants or the inmates of the residential hostel are either students or working women are not registered persons under the GST Enactments. Thus, in such an event, the exemption that is available under Entry 12 of Exemption Notification No. 12/2017-Central Tax (Rate), dated 28-6-2017 as also under the TNGST Act, 2017 and also under Entry 13 of Exemption Notification No. 9/2017-Integrated Tax (Rate), dated 28-6-2017 is applicable on all fours to the applicant herein, irrespective of the threshold limit. • The term "residential dwelling" is not defined under the CGST Act, 2017/TNGST Act, 2017. Para-4.1 3.1 of the 'Taxation of services an education guide dated 20-6-2012' which was issued by the Central Board of Indirect Taxes & Customs under the erstwhile Service Tax Regime has defined the term "residential dwelling" as : ....
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....omen/men and charges collected are nominal; Food given is the same for all occupants and no choice in menu given. • The definition of 'landlord' is given under Section 2(c) and definition of 'tenant' is given under Section 2(n) of Tamil Nadu Regulation of Rights and Responsibilities of Landlords and Tenants Act, 2017 [TNRRRLT Act, 2017], from which it can be gathered that the term 'tenant' includes 'sub-tenant' also. Thus, if the applicant is a tenant, then the hostel inmates are 'sub-tenants' and come within the ambit of 'tenants'. • Further, Section 3 of TNRRRLT Act, 2017, specifies bar on some categories of institutions wherein this Act is not applicable; Hostels do not come under this 'barred list' and hence TNRRRLT Act is applicable to hostels also; therefore, the agreement between a hostel owner (he be an owner of the premises or a tenant himself) and the hostel inmates is a 'tenancy' as per TNRRRLT Act, 2017. • The buildings used as hostels are 'residential buildings' as per the Zoning Regulations as stated in Rule 33 of the Tamil Nadu Combined Development and Building Rules, 2019 and are specified in Annexure XVIII, wherein under the R....
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....tate Authority had submitted the following remarks in respect of the questions raised by the applicant : The request of the applicant is not capable of compliance since : • The motive of the applicant is to run the ladies hostel against the CONSIDERATION and they have also admitted that they are receiving some amount for rendering accommodation and food services, which clearly falls under the ambit of definition of SUPPLY as provided in Section 7 of the TNGST/CGST Act. • The applicant registered under various Acts to run its business. The act of the applicant covers under the definition of the term "Business" as per Section 2(17) of the TNGST/CGST Act which includes any trade, commerce, manufacture, profession, vocation, adventure, wager or any other similar activity, whether or not it is for a pecuniary benefit. • The applicant is a service provider whereas they have referred the case law in respect of TNVAT Act which does not include the services but dealt with only goods. • Their services does not fall under SERVICES BY WAY OF RENTING OF RESIDENTIAL DWELLING FOR USE AS RESIDENCE since they are letting out a single room to va....
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.... has submitted their remarks on the questions raised as under : • Entry 12 of Exemption Notification No. 12/2017-Central Tax (Rate), dated 28-6-2017 covering Heading 9963 or Heading 9972 deals with "Service by way of renting of residential dwelling for use as residence". • The identical Notification under the TNGST Act, 2017 and Entry 13 of Exemption Notification No. 9/2017-Integrated Tax (Rate) dated 28-6-2017 also cover the Heading 9963 or Heading 9972 deals with "Service by way of renting of residential dwelling for use as residence". • The entries referred above have two essential conditions - 1. Service by way of renting of "residential dwelling" and 2. Use of "residential dwelling" as a place of residence. • For the applicant's hostel to be eligible for exemption under the above mentioned entries, both the conditions should be satisfied. • It is opined that with respect to the condition 1, the term "residential dwelling" is one where people reside treating it as a home or abode. Whereas a common understanding of a hostel is an establishment which provides inexpensive accommodation to persons like students, worke....
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....ing value of supply of a unit of accommodation less than or equal to seven thousand five hundred rupees per unit per day or equivalent and will attract 12% GST with effect from 18th July, 2022 as per the Principal Notification No. 11/2017-Central Tax (Rate), dated 28-6-2017 as amended by Notification No. 20/2019-Central Tax (Rate), dated 30-9-2019 and further amended by Notification No. 3/2022-Central Tax (Rate), dated 13-7-2022. In the Notification No. 20/2019-Central Tax (Rate), dated 30-9-2019, 'Hotel Accommodation' means supply, by way of accommodation in hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes including the supply of time share usage rights by way of accommodation. 5.5 Further, the Central Authority stated that the questions raised in the application are not pending or has not been decided in any proceedings in the case of the applicant as per the Centre's record. Discussion and Findings : 6.1 We have considered the submissions made by the applicant in their application for advance ruling and the submissions made by their AR during the course of personal hearing and additional submissions made t....
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....bed in the above entry and thus eligible for exemption or not. 7.1.3 In this regard, we observe that the term 'residential dwelling' has not been defined either under CGST Act or under Notification No. 12/2017. However, under the erstwhile service tax law, in paragraph 4.13.1 of the 'Taxation of Services : An Education Guide dated 20-6-2012', issued by the CBI&C, the expression 'residential dwelling' has been interpreted in terms of the normal trade parlance as per which it is any residential accommodation, but does not include hotel, motel, inn, guest house, campsite, lodge, house boat, or like places meant for temporary stay. 7.1.4 Generally, renting of residential dwelling involves letting out any building or part of the building by a lessor to a person or family (related persons) against a rent for using rooms which form part of a house as kitchen, bedroom, and living room etc., on the whole as residence. Thus, a common understanding of the term "residential dwelling" is one where people reside treating it as a home. Moreover, renting of residential dwelling does not include amenities like food, housekeeping, or laundry etc., whereas, a hostel is that of an establishment ....
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.... case renting of residential dwelling to a family or a person. Therefore, it is clear that hostels refer to a place where someone is accommodated or provided with lodging or boarding and lodging facilities against a charge or fees for the services rendered. 7.1.7 Further, we find that there are certain regulatory provisions for running hostels and license/certificates are to be obtained by a person running hostels in the State of Tamil Nadu under the respective enactments and the applicant also submitted copies of such licensees/certificates : (a) The applicant has submitted FORM D License issued by the Tahsildar, Coimbatore (North) wherein, as per Section 2 of the THE TAMIL NADU PUBLIC BUILDING (LICENSING) ACT, 1965, 'hostel is deemed to be a public building' and as per Section 3, 'No building shall be used as a public building without a license and except in accordance with the terms and conditions specified therein'. (b) Form III licence issued by the District Collector, wherein, as per Section 4 of the Tamil Nadu Hostels and Homes for Women and Children (Regulation) Act, 2014, 'No person shall, on and after the commencement of this Act, establis....
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....o decide whether the impugned property is hostel or residential dwelling for the purposes of tax. Further, the Licenses and Certificates obtained by the applicant under various enactments in Tamil Nadu, clearly leads to an inference that Hostel Buildings are considered only as commercial or public buildings and not as residential building. 7.1.11 The decision of the Hon'ble Supreme Court, relied upon by the applicant, in the matter of Kishore Chandra Singh Deo v. Ganesh Prasad Bhagat - AIR 1954 SC 316 is not applicable to the present issue. The observation of the Hon'ble Supreme Court in the said decision, that "Residence only connotes that a person eats, drinks and sleeps at that place and it is not necessary that he should own it", appear to have been made in the context of the Indian Registration Act, 1908, while dealing with the issue of permanent residency and temporary residency. This is not the issue involved here. Further, this decision is not at all helpful in understanding the phrase "Residential Dwelling for use as residence" as mentioned in the exemption notification. 7.1.12 We find that the judgments cited by the applicant are not applicable to the present case, ....
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.... Condition 12 Heading 9963 Or Heading 9972 Services by way of renting of residential dwelling for use as residence NIL NIL 7.1.15 From the above, we find that it is clear that the purpose and objective of the notification is nothing but to avoid taxing residential properties taken on rent by family or individuals and the benefit of exemption is not extended to the premises which do not qualify as residential dwelling for use as residence. Further, unless the twin conditions of 'renting of residential dwelling' for 'use as residence,' being inter-twined and inseparable, are not met, the exemption is not available. As per settled position in taxation laws, especially when exemptions or concessions or benefits are to be availed, the interpretation is to be literally and strictly construed and not in liberal terms. In effect, the place rented out is neither a residential dwelling nor being rented out for use as residence. 7.1.16 Further, it is observed that Entry at Sl. No. 14 of Notification No. 12/2017-C.T. (R), dated 28-6-2017 : Serial No. Chapter, Section, Heading, Group or Service Code (Tariff) Description of Services Rate (per cent) ....
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.... 11/2017-Central Tax (Rate), dated 28-6-2017, as amended vide Notification No. 20/2019-Central Tax (Rate), dated 30-9-2019, is reproduced as under : Sl. No. Chapter/Section/ Heading/Group or Service Code (Tariff) Description of Service Rate (%) Condition 7 Heading 9963 (Accommodation, food and beverage services) (i) Supply of "hotel accommodation" having value of supply of a unit of accommodation less than or equal to seven thousand five hundred rupees per unit per day or equivalent. 6 - (ii) Supply of 'restaurant service' ........ 2.5 (iii) Supply of goods, being food or any other article for human consumption or any drink, by the Indian Railways or Indian Railways Catering and Tourism Corporation Ltd. or their licensees, whether in trains or at platforms 2.5 (iv) Supply of 'outdoor Catering .... 2.5 (v) Composite supply of "outdoor catering" together with renting of premises ..... 2.5 (vi) Accommodation, food and beverage services other than (i) to (v) above 9 - It is observed that hotels are meant for a temporary stay (2-5 days) and have lot of facilities and staff, bu....