TaxTMI 
TaxTMI 
TaxTMI 
2025 (8) TMI 1618
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....would like to make it clear that the provisions of the Central Goods and Services Tax Act, 2017 (the CGST Act, for short) and the West Bengal Goods and Services Tax Act, 2017 (the WBGST Act, for short) have the same provisions in like matter except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean reference to the corresponding similar provisions in the WBGST Act. Further to the earlier, henceforth for the purposes of these proceedings, the expression 'GST Act' would mean the CGST Act and the WBGST Act both. 1.2 The applicant is engaged in the hotel business through its property named Orsino Spa Resort (formerly known as Hotel Pine Tree Spa Resort) located in Darjeeling. The resort comprises 45 rooms and offers various amenities such as a spa, banquet facilities, a bar, a multi-cuisine restaurant, and a cafe. The hotel offers various meal plan options along with the accommodation service as per the industry practices like AP, CP, EP. In the American Plan (AP) all the 3 meals i.e. breakfast +lunch +dinner is included. In the Continental Plan (CP), breakfast is included and in the Eur....
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..... • The EP plan, is the most basic plan offering only the room accommodation service • Continental plan is inclusive of breakfast along with the room and • AP plan, it includes all three meals along with the room accommodation 2.5 The applicant charges GST on the composite supply of services provided i.e. bundled supply of accommodation along with meal options. Although offered as bundled packages, there is a clear demarcation of charges between accommodation and food services in the pricing structure/tax invoice. 2.6 An example is being taken to illustrate the scenario which is put up in the questions above: Guests make a booking on double-sharing basis under EP plan and the tariff is Rs. 5000 per night for accommodation only. However, if they include all 3 meals (breakfast + lunch+ dinner) and book an AP plan, the total amount charged is Rs. 8000 per night. Now, in such cases although the booking is invoiced as per industry parlance under EP, AP respectively the pricing reflects a distinct segregation of Rs. 5,000 towards accommodation and Rs. 3,000 attributable to food services. This pricing approach is based on realistic and tr....
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.... combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is principal supply; • Section 2(90) defines "principal supply" as the supply of goods or services which constitutes the predominant element of a composite supply and to which any other supply forming part of that composite supply is ancillary. 2.9 Section 8 of the CGST Act, 2017 prescribes the tax liability on a composite supply. The tax liability on a composite or a mixed supply shall be determined in the following manner, namely:- (a) A composite supply comprising two or more supplies, one of which is a principal supply shall be treated as a supply of such principal supply; 2.10 As per illustration stated above the value of supply in different plans are as follows: Different Plan Value of total supply Price Breakup European Plan (Room Only) 5000 5000+0 American Plan (room + all 3 meals) 8000 5000+3000 2.11 Here, the different plans offered to the guests are a natural bundle of services in the ordinary course of business and therefore, constitutes a COMPOSITE SUPPLY of services u....
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....ss than Rs. 7,500.00. As a standard practice in the industry the applicant offers flexibility to the guests to choose from different meal-inclusive plans along with accommodation. The different plans that the applicant offers are: European Plan (EP), Continental Plan (CP) and American Plan (AP) where the terms carry their usual meanings in the hospitality industry. As per the applicant's statement, he charges GST on the composite supply of services provided i.e. bundled supply of accommodation along with meal options. Although offered as bundled packages, there is a clear demarcation of charges between accommodation and food services in the pricing structure and tax invoice. The applicant has placed an example of the whole thing. Suppose guests make a booking of a room on double sharing basis under EP plan and the tariff is Rs. Rs. 5,000.00 per night for accommodation only. However, if they include all three meals (breakfast, lunch and dinner), the total amount charged is Rs. 8,000.00 per night. In such case the pricing reflects a distinct segregation of Rs. 5,000.00 towards accommodation and Rs. 3,000.00 attributable to food services. According to the statement of the applic....
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....ccommodation 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. Here accommodation service refers to providing residential or lodging services for a short period where the tariff for a unit of accommodation is usually declared per unit per day. Accommodation service may include certain other facilities depending on the policy of the hotel. For example, in the case of the applicant, they have submitted that for the rooms under EP (European Plan) accommodation service refers to facility for staying in the room only. Again for the rooms under AP (American Plan) accommodation service refers to facility for staying in the room and all meals. For the rooms under CP (Continental Plan) accommodation service means facility for staying in the room and breakfast. Room Tariff: It refers to the price charged by the hotel to the occupant for a particular room on per day basis. Usually it indicates the price for staying in the room only. However, depending on the policy of the hotel this may include charges for certain other services as well. For example....
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..... 1. The concept of declared Tariff has been done away with from 01.04.2025 onwards. 2. As the concept of declared tariff has been abolished, the value of supply in respect of a hotel will follow the concept of value of supply as provided under Section 15 of the GST Act from 01.04.2025 onwards. It will be the actual value of supply charged by the hotelier. 3. The definition of specified premises has been changed. For the period prior to 01.04.2025, "specified premises" meant premises providing 'hotel accommodation' services having declared tariff of any unit of accommodation above seven thousand five hundred rupees per unit per day or equivalent. From 01.04.2025, the definition of "specified premises" for a financial year includes any one of the followings: A. Price-based criteria: Any premises where hotel accommodation services were provided in the previous financial year, with price exceeding seven thousand five hundred rupees per unit per day for any unit of accommodation. B. Voluntary declaration by the existing suppliers: Any premises for which a registered hotel service provider declares his premises as "specified premises" between 1st January an....
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....arrangement, but the breakfast is usually a lighter, continental-style meal. Generally, the guests do not receive any reduction in the room rate if they skip any/ all of the meals in an AP (American Plan) or breakfast in a CP (Continental Plan) package. AP or CP typically includes the room rate plus three meals (breakfast, lunch, and dinner) or breakfast respectively as a bundled package. The price is usually set to cover the cost of both the room and the meals. So not utilizing the meals does not usually result in a reduced rate. Hotels often structure their pricing with the AP or CP as a package deal. The cost of the meals is factored into the overall price, even if guests do not consume them. Hotels have fixed costs associated with providing meals, such as staff, ingredients, and overhead for kitchen and serving. These costs are spread across all guests, regardless of whether they choose to eat all or some of the meals or not. In most of the cases, hotels do not show separately in the bill the charges for the room and the meals when a room is booked on an AP or a CP. AP or CP is offered as package. Therefore no reduction is given to the guests if they skip any /all of the mea....
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....in case of guests opting for CP or AP as per their preferences. Even the rates of rooms in CP or AP are quoted, as per the norms of the industry, in a consolidated manner. There is no such separate quotation for room rate and charges for food. The applicant may bifurcate the charges for room and food but this does not mean that the accommodation service as referred to in the application for advance ruling is really a bifurcated one. Rather the two (room accommodation and food) form a composite supply, with the principal supply being accommodation service (SAC code 99631) falling under serial no. 7 of Notification No. 11/2017-Central Tax (Rate) Dated 28.06.2017 and the corresponding State Tax notification. So the value of supply in such cases is to be calculated on the basis of the total amount charged (but shown separately by the applicant) for the supply. The hotels quote the consolidated rate for AP or CP where no breakup is shown. If the guests skip a meal/ meals no proportionate deduction is made from this consolidated rate quoted. This clearly proves beyond doubt that in such cases the accommodation rate includes both lodging and food expenses. The bifurcation of charges be....
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....y as defined in Paragraph 4.3 of any room exceeds Rupees Seven thousand five hundred in financial year 2024-25. If the said value of supply of any room does not exceed Rupees Seven thousand five hundred in financial year 2024-25, the premises of the applicant will not be considered as 'specified premises. It is needless to mention that the value of supply obviously refers to the total price charged by the applicant in an AP or CP as detailed in the foregoing discussion. During personal hearing we are informed that the applicant has not filed declaration Annexure VII. The applicant was asked to furnish the details of room rentals for financial year 2024-25 and the applicant complied with. From the list as furnished before us it is observed that the highest room rate for 2024-25 was Rs. 7,480.14 vide bill no. OHR/2425/2240 Dated 20.12.2024. In our considered view, since the total value of supply as referred to in Paragraph 4.3 in a combined form (room charge and food charge) as submitted by the applicant has not exceeded Rupees Seven thousand five hundred per day per room in AP or CP for financial year 2024-25 in case of any room, the applicant's hotel will not be considered as....