In re Mangaldas Mehta and Co. Limited (GST AAR Gujarat)
The present application has been filed under section 97 of the Central Goods and Services Tax Act, 2017 and the Gujarat Goods and Services Tax Act, 2017 [herein after referred to as “the CGST Act” and GGST Act”] by M/s. Mangaldas Mehta and Co. Limited, House of MG, Opp. Siddi Saiyed Jali, Lal Darwaja, Ahmedabad, Gujarat-380001, the applicant, seeking an advance ruling in respect of the following question:
(i) Whether the invoice of the applicant containing items reflecting charges towards room stay, service charge, breakfast, airport pick up and drop, extra bed form a part of tariff in order to ascertain the rate of GST as per the slabs provided under Notification No.11/2017- Central Tax (Rate) i.e. what will be the liability to pay GST i.e. to say that declared tariff represents only the charges for room stay plus service charge and the customer books only hotel accommodation and the rest optional facilities are procured after checking in at the hotel ?
(ii) If the answer to query no. 1 results in liability to pay GST as in tariff being lesser than Rs.7,500/-, whether the applicant will be liable to pay 5% GST on restaurant services to the guest who stays at hotel as well as to any outsider who comes just to eat at the restaurant and not 18% GST in terms of Notification no. 46/2017- Central Tax (Rate)?
(iii) If the applicant is charging money towards room stay, breakfast, airport pick up and drop, as well as extra bed plus meals i.e. the package covers everything and individual value is not assigned at the time of booking but when invoice is given to the customer there is a specific mention of each item and separate value assigned to each service, and the sum total exceeds Rs.7,500/-, what would be the liability of GST i.e. the price offered to customer represents a package offering a bouquet of services ?
(iv) If the answer to query no. 3 results in liability to pay GST as in tariff being lesser than Rs.7,500/-, whether the applicant will be liable to pay 5% GST on restaurant services to the guest who stays at hotel as well as to any outsider who comes just to eat at the restaurant in terms of Notification No. 46/2017- Central Tax (Rate) and not 18% GST?
(v) During the financial year, on account of low season, the tariff remains below Rs.7,500/-. However in peak season, the room tariff exceed Rs.7,500/-, then in this situation, whether the liability of the applicant to pay GST at 18% on restaurant arises from inception or from the day the tariff exceeds Rs.7,500/- and it falls back to 5% as soon as the tariff falls below Rs.7,500/- ?
(vi) The applicant has certain lower category of rooms wherein the tariff at which they are sold at includes break-fast. In this scenario, what will be the liability to pay GST on room tariff and breakfast in the event the applicant is liable to pay only 5% GST on restaurant services as tariff falls below Rs.7,500/- and low category rooms are sold at Rs.3,400/-?.
2. At the outset, we would like to make it clear that the provisions of both the CGST Act and GGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to any dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the GGST act. Further to the earlier, henceforth for the purpose of this Advance Ruling, the expression ‘GST Act’ would mean CGST Act and GGST Act.
3. Applicant’s Opinion
In their opinion, the Notifications issued in relation to the rate of 5% GST on restaurant are ambiguously worded. Before entering the labyrinth of queries, the applicant would like to refer to certain definitions provided under GST Act, clarifications issued and certain relevant parts of Notification.
What does Notification 46/2017- CGST (Rate) say ?
The text of the Notification No.46/2017- CGST (Rate) reads thus:
