provided by applicant mixed supply
Case Title | Oswal Industries Limited |
Court | Appellate Authority for Advance Ruling, Gujarat High Court |
Honorable Judges | Member Seema Arora and Member Milind Torawane |
Citation | 2022 (2) GSTPanacea 363 HC Gujarat GUJ/GAAAR/Appeal/2022/03 |
Judgement Date | 17-February-2022 |
Council for Petitioner | Mr Anil Gidwani |
Council for Respondent | Mr S Ravi Shankar Narayan |
In favour of | Respondent |
Section | Sl. No. 74 of Services Exemption Notification. |
The Appellate Authority for Advance Ruling, Gujarat bench of Member Milind Torawane and Seema Arora, held that the Applicant is not eligible for the exemption under Sl. No. 74 of Services Exemption Notification.
provided by applicant mixed supply
Facts of the Case
Nimba Nature Cure Village (“Nimba”) is a unit of M/s. Oswal Industries ltd. (“the Applicant”) which is a Naturopathy Centers and offers physical, psychological and spiritual health overhaul with the help of power of nature. Further, the Applicant provide different types of wellness facilities at Nimba such as naturopathy, ayurveda, yoga and meditation, physiotherapy and special therapy. The packages offered by the Applicant from their website is strictly on a residence basis and the consideration is solely dependent on the type of room opted by the customer.
Whether the supply is composite supply so as to get the benefit of exemption of health care services under Sl. No. 74 of Notification No.12/2017-Central Tax (Rate) dated June 28, 2017 (“Services Exemption Notification”)
provided by applicant mixed supply
Court Held
The AAR, Gujarat in Re: M/S. Oswal Industries Ltd held that, the supply of services provided by the Applicant is a composite supply wherein the principal supply is accommodation since the therapy can in no way be administered without accommodation. Further, there is no option available for the customer to avail the wellness package without opting for the accommodation. Therefore, it is classifiable under sub-heading 996311 under ‘Room or unit accommodation services provided by Hotels, Inn, Guest House, Club and the like’ and not under Sl. No. 74 of Services Exemption Notification which is applicable to services falling under the Heading 9993 i.e., health care services. Hence, the Applicant is not eligible for the exemption under Sl. No. 74 of Services Exemption Notification.
provided by applicant mixed supply
Analysis of the Judgement
As per the above case we analyse that main supply must be seen for the purpose of determining the principal supply. In the above ruling, the main supply is that of wellness facilities/ therapies and not of accommodation. Further, the customers of the Applicant go to Nimba for wellness facilities/ therapies and not for the purpose of accommodation. Thus, the principal supply should have been of wellness facilities/ therapies only.
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