In re Feel Good Hospitality Private Limited (GST AAR West Bengal)
The West Bengal Authority for Advance Ruling considered an application by Feel Good Hospitality Private Limited, a registered GST taxpayer engaged in restaurant business, proposing to expand into travel and accommodation booking agency services. Under the proposed model, customers would approach the applicant for hotel bookings, the applicant would arrange accommodation through a third-party agent, and the hotel or third-party agent would issue an invoice in the applicant’s name while identifying the end customer. The applicant proposed to recover the actual hotel accommodation cost from customers as reimbursement and separately charge a facilitation/service fee, seeking to treat the reimbursement as expenditure incurred as a “Pure Agent” under Rule 33 of the CGST Rules, 2017 and charge GST at 18% only on the facilitation fee.
The applicant submitted that all four conditions under the Explanation to Rule 33 were satisfied: it would act pursuant to an agreement with the customer, would not hold title to or use the hotel accommodation for its own interest, and would recover only the actual hotel cost without markup. It also relied upon Sections 2(5), 2(105), 2(107) and 15 of the CGST Act, 2017 and the ruling in M/s TUI India Private Limited, Order No. 09/DAAR/2018 dated 28.06.2019, arguing that hotel accommodation costs recovered at actuals should be excluded from the value of its booking service.
