In re Shiva Residency (GST AAR Tamilnadu)
Whether the hostel accommodation extended by the Applicant would be eligible for exemption ?
FULL TEXT OF THE ORDER OF AUTHORITY FOR ADVANCE RULING, TAMILNADU
The applicant, M/s. Shiva Residency, No.8, PKD Nagar, Peelamedu, Coimbatore – 641 004 (herein after referred to as ‘The Applicant’), is registered under the GST Act, 2017, with GSTIN 33AAUPL3828R2ZT. 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 are providing best hostel facilities to college female students and also to working women as most of the students and working people travel far and wide from their remote villages. The total charges collected for Boarding and lodging ranges between Rs.200/- per day to Rs.250/ – per day. Thus, the monthly tariff per student or per inmate ranges between Rs. 6000/- to Rs. 7500/- per month per inmate. They provide single room occupation, or double room sharing or dormitory style of accommodation and rates vary accordingly.
2.3. The Applicant’s interpretation of law/facts in respect of the questions raised, they submitted the following that-
> They have licence to run the residential hostel for boarding and lodging under Section 5 of the Tamilnadu Hostels and Home for women and children (Regulation Act 2014) [hereinafter referred to as the “Hostel Regulation Act”].
> Section-2 (e) of the ‘Hostels Regulation Act’ defines “Hostel” or “Lodging House” to mean ‘a building in which accommodation is provided for women or children or both either with boarding or not.’ The term ‘Home for Women & Children” is defined in section-2 (d) to mean ‘an institution, by whatever name called, established or maintained or intended to be established or maintained for the reception, care, protection for welfare of women or children or both’; On the other hand, the term ‘residential hotel’ is defined in section-2 (14) of the Tamilnadu Shops & Establishments Act, 19/17 to mean ‘any premises in which business is carried on bonafide for the supply of dwelling accommodation and meals on payment of a sum of money to a traveller or any member of the public or class of the public’; Thus, the `hostel’ accommodation which falls within the purview of the ‘Hostels Regulation Act’ cannot be equated with that of a ‘hotel accommodation which falls within the realm of Tamilnadu Shops & Establishments Act, 1947 by any stretch of imagination.
> Under the erstwhile Service Tax regime, the ‘services by way of renting of residential dwelling for use as residence’ was included in the negative list under clause (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 relied 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 Notifications above mentioned, Entry No. 12 of Exemption Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 [similar entry: Entry 13 of Exemption Notification No.9/2017 Integrated Tax-Rate dated 28.06.2017] reads as follows:
