|
Case Title |
Kalani Infrastructure Private Limited |
|
Court |
Rajasthan AAAR |
|
Honorable Judges |
Member Sh.Pramod Kumar Singh & Member DR.Preetam B.Yashvant |
|
Citation |
2020 (05) GSTPanacea 35 HC Rajasthan RAJ/AAAR/7/2019-20 |
|
Judgement Date |
12-May-2020 |
|
Council for Petitioner |
Keshav Maloo Nikhil M.Jhanwar |
|
Council for Respondent |
NA |
|
Section |
Section 101 |
|
In Favour of |
In Favour of Assessee |
The Rajasthan bench of Member Sh.Pramod Kumar Singh & Member DR.Preetam B.Yashvant has held that it can be ascertained that the provision of hostel accommodation could be a principal supply but ancillary services like food, gym, housekeeping, play room, cannot be said to arise naturally with the principal service of hostel accommodation and therefore are not bundied naturally with principal supply.
FACTS OF THE CASE
The M/s. Fortune Icon, a unit of M/s. Kalani Infrastructure Pvt. Ltd. is running a Hostel for residential accommodation of students. The appellant wish to charge a consolidated amount of Rs. 17,000/- per month from the students against provision of hostel accommodation for residence purposes which would also include ancillary supply of food with certain other facilities
an application was filed by them before Rajasthan Authority of Advance Ruling to determine classification and taxability of hostel accommodation where food and other general facilities are also provided, and no separate amount is charged from the students for the same. Question which the Advance Ruling was sought, are as under:-
- Whether provision of hostel accommodation along with food facility to the students wherein consolidated amount is charged from the students is a composite supply where principal supply is that of rent of hostel accommodation?
- Whether the entire charge recovered from the students would be exempt from GST under Sr. No. 14 of the CGST (Rate) Notification No. 12/2017 dated 28.06.2017 as amended if the charges per day is less than Rs. 1000/
- To determine the taxability on supply of hostel accommodation along with food facility
- To determine the appropriate classification and applicable rate of GST on supply of hostel accommodation along with food facility.
However, the Authority did not find favour and issued the Advance Ruling holding that:-
(a) The provision of hostel accommodation along with food facility, Play Room, Gym, Housekeeping, Room Cleaning to the students wherein consolidated amount is charged from the students is Mixed Supply.
(b) The entire charges recovered from the students are not exempted from GST under Sr. No. 14 of the CGST (Rate) Notification No. 12/2017 dated 28.06.2017.
(c) As various services provided by the applicant constitute a Mixed Supply, the rate of GST on whole supply will be the rate of supply which attracts highest rate of GST. As the highest rate amongst services provided is 18%, accordingly, rate of GST on whole supply will be 18% (SGST 9% + CGST 9%).
Aggrieved by the aforesaid Ruling above, the appellant has preferred the present appeal before this foru
COURT HELD
Considering the facts bench find that 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 services like food, gym, housekeeping, play room, cannot be said to arise naturally with the principal service of hostel accommodation and therefore are not bundied naturally with principal supply.
Bench find that contentions of the appellant have already been examined by the Rajasthan Authority’ of Advance Ruling and a well-reasoned order has been passed with detailed findings.
Bench do not find any infirmity in the Advance Ruling pronounced by Rajasthan Authority of Advance Ruling.
ANALYSIS OF THE JUDGEMENT
Bench the Rajasthan Authority’ of 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.
Rajasthan Authority of Advance Ruling has placed reliance on the ruling of West Bengal Authority for Advance Ruling in the case of Sarj Educational Centre involving similar facts and circumstances, wherein the applicant was engaged in supplying food and other services, etc and it was held that they are not naturally bundled with the lodging service. All these components are independent of each other. The said ruling has been upheld by the Appellate Authority of Advance Ruling of West Bengal.
Download PDF:
Kalani Infrastructure Private Limited
For Reference Visit:
Rajashtan High Court
Read Another Case Law:
GST Case Law