In re Orsino Hotels & Resorts LLP (GST AAR West Bengal)
The West Bengal Authority for Advance Ruling (AAR) addressed a query from Orsino Hotels & Resorts LLP concerning the Goods and Services Tax (GST) rate for accommodation services provided to the Reserve Bank of India (RBI). The applicant, a hotel in Darjeeling, entered a contract with the RBI to provide a minimum of two rooms daily for its officers and families. The agreed-upon room rate was below Rs. 7,500 per day per unit, and the applicant sought clarification on whether the applicable GST rate would be 12%. The applicant also raised a secondary question about whether this arrangement should be classified as “hotel accommodation” or “renting of immovable property,” citing the RBI’s practice of deducting Tax Deducted at Source (TDS) under the Income Tax Act for rent payments.
The AAR’s analysis confirmed that the services provided fell under hotel accommodation, not “renting of immovable property.” The ruling clarified that, under GST law, the concept of “renting” requires the demarcation and exclusive possession of a specific property portion. In contrast, the agreement with RBI provided rooms on an availability basis without assigning a specific, exclusive space. The AAR emphasized that the GST Act and the Income Tax Act are distinct, and the RBI’s TDS deduction under the Income Tax Act for rent does not dictate the classification of the service for GST purposes. The ruling also noted that recent changes in GST law, effective April 1, 2025, have abolished the “declared tariff” concept, basing the tax rate on the actual value of the supply.
