TaxTMI 
TaxTMI 
2023 (9) TMI 1634
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....y fraud or suppression of material facts or misrepresentation of facts, shall render such ruling to be void ab initio in accordance with Section 104 of the Act. 5. The provisions of both the Central Goods and Service Tax Act and the Tamil Nadu Goods and Service Tax Act (herein referred to as an Act) are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the Central Goods and Service Tax Act would also mean a reference to the same provisions under the Tamil Nadu Goods and Service Tax Act. M/s. Shriram Sai Nest Ladies Hostel, No. 10, Gokulam Colony, 4th Street, P.N. Pudur, Coimbatore 641041 (herein after referred to as The Applicant'), is unregistered with GST. The Applicant is running a ladies residential hostel for college students and working people. 2.1. The Applicant has submitted the copy of application in Form GST ARA - 01 and also submitted a copy of challan evidencing payment of application fees of Rs. 5,000/- each under sub-rule (1) of Rule 104 of CGST Rules 2017 and SGST Rules 2017. 2.2. The Applicant submitted that they have taken the premises on rent and they further let i....
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....ices by way of renting of residential dwelling for use as residence' was included in the negative list under S.No. (m) of Section-66D of the Finance Act 1994. Similarly, no VAT was leviable for supplying food to inmates, being an incidental activity to the activity of accommodation and reliance was also made on the Hon'ble Andhra Pradesh High Court decision in the case of Bharatiya Vidya Bhavan's Residential Public School v. State of Andhra Pradesh. • Under the Exemption Notification, Entry No. 12 of Exemption Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 [similar entry 13 of Exemption Notification No.9/2017- Integrated Tax-Rate dated 28.06.2017] reads as follows: Serial No. Chapter, Section, Heading, Group or Service Code (Tariff) Description of Services Rate (%) condition 12 Heading 9963 Or Heading 9972 Services by way of renting of residential dwelling for use as residence NIL NIL • 'Residential accommodation' falls under the unconditionally exempt category. It is submitted that Entry 12 of Exemption Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 (and Entry 13 of Exemption No....
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....2001 is relied upon. • Reliance can be made on the decision of the Hon'ble Karnataka High Court in the case of Taghar Vasudeva Ambrish -vs- Appellate Authority for Advanced Ruling, Karnataka, wherein the Hon'ble High Court has held the identical question of law in favour of "hostels" and has held that the exemption available in Entry 13 of Exemption Notification No.9/2017- to a residential Integrated Tax-Rate dated 28.06.2017 is available hostel/residential dwelling meant for students or working people. • The hostels attached to educational institutions are exempt from GST and the applicant's hostel which essentially caters to students at very nominal charges in contrast to hostels attached to educational institutions also has to be exempt from the levy of GST and ought to fall outside the scope of levy. • They expend the nominal amount collected from the inmates on their food and clean environment with no profit motive. 3.1. The Applicants were offered personal hearing on 26.07.2023, wherein Smt. Aparna Nandakumar, Advocate (Authorised Representative -AR) appeared for the Applicant and reiterated the submissions made in the app....
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....icial documents. • Reliance is made on the following decisions: i. The Hon'ble Supreme Court in Para 11 of the judgment in Kishore Chandra Singh Vs Babu Ganesh Prasad Bhagat AIR 1954 SC 316 has held that expression residence only connotes that a person eats, drinks and sleeps at that place and it is not necessary that he should own it. ii. SC decision in Jagir Kaur Vs Jaswant Singh - Criminal appeal 143/1961 dated 13.02.1963 for the word 'reside'. iii. Delhi High Court judgment dated 22.09.1976 in VL Kashyap Vs R P Puri for the word 'dwelling house' or 'residential house'. iv. SC judgment dated 25.03.1981 in Indo International Industries Vs Commissioner of Sales Tax for submission that in the absence of a definition in the Enactment, dictionary meaning/popular meaning can be resorted to. v. SC judgment dated 13.09.2006 in CCE Vs Air Conditioning Corporation. vi. In Balakrishna Vs Sakuntala Bai AIR 1942 MAD 666, it was held that the expression 'resides' implied something more than 'stay' and implied some intention to remain at a place and not merely to pay it a casual visit....
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.... the claim of renting of residential dwelling for the use as residence become failure. 4.2. In addition to the above, the State Jurisdictional authority further stated that they are rendering services by way of renting of immovable property with a business motive for pecuniary benefit. These services are classified under Heading 9963 (Accommodation, food and beverage services). The services rendered by the applicant clearly falls under Entry No. 7 (ix) of the Notification No. 11/2017 Central Tax (Rate) dated 28.06.2017 viz. Accommodation, food and beverage services other than (i), (ii), (iii), (iv), (v), (vi), (vii) and (viii) above and the rate of tax to the services are the settled one as per rate notification. From the above analysis of the issue in the hands, the following rate of tax is to be levied for the services rendered by the applicant with effect from 01.07.2017 upto 29.09.2019. Sub-Heading DESCRIPTION RATE OF TAX 996321 Room or unit accommodation services for students in student residences 18% 996322 Room or unit accommodation services provided by Hostels, Camps, Paying Guest etc. 18% 996329 Other room or unit accommodation services ....
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....s would not amount to "residential dwelling". • Moreover, hostels even though given for residential or lodging purposes are commercial places registered as "commercial establishments" for the purposes of electricity, water, trade licence etc. Therefore, the applicant's hostel cannot be termed as "residential dwelling" and has to be treated as a commercial place only. 5.2. The Central Authority further stated that coming to the second condition of the entry in the notification, it needs to be mentioned that it is intended for residential dwellings which are rented out for use as residence. Assuming but not admitting that the applicant's hostel is a residential dwelling, the same has to be rented out for use as residence. Whereas in the facts of this case it is rented out for use as a hostel facility or paying guest accommodation facility. As it is not rented out for use as residence but rented out as a hostel/paying guest accommodation facility, the exemption can't be extended. To put it in a nutshell, the place rented out is neither a residential dwelling nor being rented out for use as residence. Therefore, the applicant is not eligible for the benefit ....
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....stated that - • they are running a ladies hostel providing boarding and lodging facilities to students and working women. They are also providing certain ancillary services such as housekeeping, security arrangements, Television, parking facility etc. • charges of Rs. 6500/- per bed is being collected per inmate per month for providing all the above facilities excluding electricity charges; the charges collected are per bed charges and these charges are also dependent on number of persons sharing the room; the invoices to the habitants are raised accordingly. • the premises used for providing these services are not owned by the Applicant but taken on rent. 6.4. The Applicant claims that the immovable property being used for providing accommodation is a residential dwelling which is used as residence by the inmates and thereby the rent received on such accommodation qualifies for GST exemption in terms of Entry No. 12 of Notification 12/2017 - Central Tax (Rate), dated 28.06.2017. 7.1.1. The first question raised by the Applicant is whether the hostel accommodation extended by the Applicant hostel would be eligible for exemption under Ent....
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.... room being used as kitchen and the other/part as living room etc. But, in the instant case, a single house with two or more rooms where normally a single family resides, is subdivided, and let out to different persons and rent being collected on per bed basis with bundle of other services against a consideration clearly constitutes a business of supplying accommodation services as well, the impugned along with ancillary services. Thus, on this count accommodation thus provided does not qualify as a residential dwelling and thus the question of using the same as residence does not arise. 7.1.6. Regarding the second part of the description of service 'for use as residence' it is observed that, though accommodation and residence seems to be synonymous, there is a subtle difference between the two. An accommodation is a location where someone is accommodated or provided with lodging. The term residence on other hand, in common usage, refers specifically to a place where someone resides permanently or for an extended period of time along with family/dependents; Therefore, we observe that hostels are nothing but accommodations which provide temporary lodging to the inmates, w....
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....nadu Public Health Act, 1939. ii. Trade licence issued by the Coimbatore City Municipal Corporation under the provisions of the Coimbatore City Municipal Corporation Act, 1981. iii. No objection certificate issued by the District Officer, Tamilnadu Fire and Rescue services. iv. Stability Certificate (Form A) issued by Charted Civil Engineer License issued under Food Safety and Standards Act, 2006, for food services. We find that the above provisions are not mandatory or applicable to a typically residential building or "residence dwelling for use as residence", whereas it is mandatory for a hostel building. This also shows that hostel building cannot be considered as residential dwelling but a non-residential complex. 7.1.8. The exemption on "services by way of renting of residential dwelling for use as residence" envisaged under the said notification is conditional and restricted only the recipient of the services and NOT beyond. In other words, supply is the fulcrum of GST, the transaction of supply (with regard to Applicant) ends with the recipient of services only, insofar as the GST is concerned. Now, it is clearly known that the Applicant is n....
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....ile 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, as the facts of those cases are entirely different from the present case. A judgment should be understood in the light of facts of the case. Also, decisions of those cases were not in the context of GST laws. Hence the various case laws cited by the Applicant is of no avail. 7.1.13. Further, exemption notification should be interpreted strictly. The Hon'ble Apex Court of India has made this abundantly clear in the case of Commissioner of Customs(Import), Mumbai Vs. Dilip Kumar & Company [2018 (361) E.L.T. 577 (SC)], while answering the question, 'what is the interpretative rule to be applied while interpreting a tax exemption provision/notification when there is ambiguity as to its applicability with reference to the entitlement of the assessee or the rate of tax to be applied?' held that that: ....
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....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- CT (R), Dated 28-6-2017: declared tariff of a unit of accommodation below one thousand rupees per day or equivalent Serial No. Chapter, Section, Heading, Group or Service Code (Tariff) Description of Services Rate (percent) 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 was omitted vide Notification No. 4/2022 dated 13.07.2022. Thus, in effect, from 13.07.2022, only services by way of renting of residential dwelling for use as residence are exempted from GST. 7.1.17. Hence, it is clear that hostel accommodation is not equivalent to residential accommodation and hence we hold that the services supplied by the Applicant would not be eligible for exemption under Entry 12 of Exemption Notification No. 12/2017-CT(Rate) da....
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....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, but hostels are used for a longer period and have basic facilities with minimal staff required by the inmates to stay at a reasonable rate. Therefore, hostel services cannot be equated to a hotel accommodation and hotel GST rates cannot be applied to a hostel. Therefore, we hold that supply of hostel accommodation services (Tariff heading 9963) is taxable @ 9% CGST + 9% SGST under Sl.No. 7(vi) of the above Notification (Sl.No. 7 (ix) as per original notification). 7.4.1. Regarding the fourth question raised by the Applicant, which is in the event of the hostel accommodation being an exempt activity, whether the incidental activity of supply of in-house food to the inmates of the hostel would also be exe....