In re Orsino Hotels & Resorts LLP (GST AAR West Bengal)
In a case involving Orsino Hotels & Resorts LLP, the West Bengal Authority for Advance Ruling (AAR) addressed the appropriate Goods and Services Tax (GST) classification and rate for meal plans and restaurant services. The applicant, a hotel in Darjeeling, provides various services, including accommodation bundled with meals under American Plan (AP) and Continental Plan (CP), and separate restaurant services for walk-in guests. The central questions were the GST rate for the food component in meal plans when the total bill exceeds Rs. 7,500, and the rate for the hotel’s separate restaurant service for walk-in customers.
The AAR determined that the hotel’s bundled services (accommodation and meals) constitute a “composite supply”. In this type of supply, the principal supply is the hotel accommodation, and the entire value of the bundle is taxed at the rate applicable to the principal supply. The AAR ruled that even if the invoice shows separate charges for the room and food, the total value must be considered when determining the GST rate. If this combined value exceeds Rs. 7,500 per day per unit, the entire supply is subject to an 18% GST rate (9% CGST + 9% SGST).
