In re Sri DMS Hospitality Private Limited (GST AAR Karnataka)
1. Classification of service provided by Sri DMS Hospitality Private Limited to Sodexo Food Solutions India Private Limited?
The Classification of service provided by Sri DMS Hospitality Private Limited to Sodexo Food Solutions India Private Limited is covered under SAC 997212 and hence under entry no. 16 of Notification No.11/2017 – Central Tax (Rate) dated 28.06.2017 and the security services provided is covered under SAC 998529 and hence under entry 23(ii) of Notification No.11/2017- Central Tax (Rate) dated 28.06.2017 and are hence liable to tax at respective rates.
2. Classification of service provided by the Building owner to Sri DMS Hospitality Private Limited?
The Classification of service provided by the building owner to M/s Sri DMS Hospitality Private Limited is covered under SAC 997212 and hence liable to tax under entry no. 16 of Notification No.11/2017 – Central Tax (Rate) dated 28.06.2017.
The applicant is also providing security services and charging Rs.32,000/- per month. This supply is liable to tax as applicable under SAC 998529 and is liable to tax at 18% (CGST @ 9% + KGST @ 9%) under entry 23(ii) of Notification No.11/2017- Central Tax (Rate) dated 28.06.2017 and is payable under Reverse Charge Mechanism by the recipient of service, if he is registered, as per Notification No.13/2017-Central Tax (Rate) dated 28.06.2017 as amended by Notification No.29/2018- Central Tax (Rate) dated 31.12.2018 (effective from 1.1.2019).
3. Applicability of GST Notification No. 12/2017-Central tax (Rate) dated 28th June 2017, “Services by way of renting of residential dwelling for use as residence” is exempt from GST?
The entry no.12 of Notification No.12/2017- Central Tax (Rate) dated 28.06.2017 – “services by way of renting of residential dwelling for use as residence” is not applicable to the present case on hand.
4. Applicability of GST on EMI per month charged from Sodexo Food Solutions India Private Limited and security services provided by Sodexo Food Solutions India Private Limited?
The applicant is also providing additional facilities like Dining Tables/ Chairs, Partitions, Water purifiers, Bunk beds with lockers, TV with DTH Connection and the entire investment made is recovered with 12% interest per annum at the rate of Rs.1,22,893/- per month. This amounts to supply of goods as per entry no.1(c) of Schedule II to the Central Goods and Services Tax Act which reads “any transfer of title in goods under an agreement which stipulates that property in goods shall pass at a future date upon payment of the full consideration as agreed, is a supply of goods”. Accordingly it is liable to tax at the rate applicable to each of the goods at the time the delivery of the goods is given to Sodexo Food Solutions India Pvt. Ltd.
The EMI charged on the goods supplied is an installment for the goods transferred and is a supply of goods under clause 1(c) of Schedule II to the CGST Act and hence is liable to tax at the rate applicable to each of the goods supplied at the time of delivery of such goods.
Read AAAR Ruling in this case – GST on additional facilities provided with accommodation services
