Case Law Details
In re Mody Education Foundation (GST AAR Rajasthan)
Whether Hostel Accommodation Charges per Hostel Seat provided by the Mody Education Foundation (MEF) to the students of Mody University of Science and Technology (MUST) having value of service upto Rs. 1000/- per day would be eligible for exemption under entry no. 14 of the Notification No. 12/2017 dated 28-06-2017?
On gone through of above exemption Entry No. 14 of the Notification No. 12/2017-CT (R) Dated 28.06.2017 as well as above discussed CBIC’s Circular No. 32/06/2018-GST dated 12th February, 2018, we find that the description of service is user based, meaning that, if the accommodation is used for residential or lodging purpose then it is immaterial who the user is. The said entry mentions “Services by a hotel, inn, guest house, club or campsite, by whatever name called, for residential or lodging purposes”. The word ‘hostel’ not being specifically mentioned implies that the same would be covered under the term ‘Whatever name called’. The services provided by such hostel, for residential or lodging purposes would be covered by the scope of notification entry where the declared tariff of a unit of an accommodation is below one thousand rupees per day. Therefore, the scope of the entry is restricted to use of the accommodation unit for residential and lodging purpose only. In consonance with the ruling passed by Hon’ble Rajasthan Appellate Authority for Advance Ruling (RAAAR) we also find that ‘Hostel Seat’ as an ‘unit of accommodation’ in the instant case.
In the instant case, we further find that the service of hostel is optional and not coming out from the package and separate consideration will be charged for providing such hostel facility to the students. In fact, the hostel fees are not a part of any package concerning commercial training & coaching services rendered by the applicant. The Applicant is exclusively providing the Hostel Accommodation Service in isolation and no other service is clubbed or bundled along with the Hostel Accommodation Service. Thus, there is no question of Composite Supply u/s 2 (30) of the GST Act or Mixed Supply u/s 2(74) of the GST Act in the Case of the Applicant.
The Entry No. 14 of Notification No. 12/2017-Central Tax (Rate) is analysed by us thoroughly. It says all services of SAC 9963 provided by sue a supplier having a declared tariff of less than Rs. 1000-00 per day or equivalent would be exempt. As the applicant who is also registered as Charitable Trust’ as per Form No. 10AC of the Income Tax Act, 1961 will charge less than Rs. 1000/- per ‘Hostel seat’ per day from students therefore, the said service is exempted from GST with a condition that this value should be in lieu accommodation facility only and should not be for mixed supply including food & beverage etc. Therefore, considering the provisions of Entry No. 14 of the Notification No. 12/2017-CT (R) Dated 28.06.2017 and clarification given by CBIC in Circular No. 32/06/2018-GST dated 12th February 2018, it is concluded that, the applicant’s activity is satisfying the conditions of Entry No. 14 of said Notification No. 12/2017-CT (R) Dated 28.06.2017 and hence would be exempted from GST.
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