Case Law Details

Case Name : In re M/s. Kerala Forest Development Corporation Ltd. (GST AAR Kerala)
Appeal Number : Advance Ruling No. KER/33/2019
Date of Judgement/Order : 01/03/2019
Related Assessment Year :
Courts : AAR Kerala (89) Advance Rulings (1533)

In re M/s. Kerala Forest Development Corporation Ltd. (GST AAR Kerala)

Tax liability under GST for the tour packages, which are providing to guests by way of separate services like accommodation, serving food and beverages, service of authorized guides, trekking accessories etc. against separate invoices.

In case where a supply involves supply of both goods and services and the value of such goods and services supplied are shown separately, the goods and services would be liable to tax at the rates as applicable to such goods and services separately.

FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING,KERALA

Kerala Forest Development Corporation has been established with an unique commitment to preserve the culture and beauty of forest and for the development of Eco-Tourism in the State of Kerala. Accordingly, the applicant is conducting Eco-tourism activities in the reserve forest at Munnar, Gavi, Nelliyampathy and Arippa. The objective of Eco-Tourism programs is to provide the guests the experience of the wild life in natural habitat and to create awareness for conservation as well as protection of forest wild life. The applicant offers tour packages at Munnar, Gavi, Nelliyampathy and Arippa. The charges for tour package depends upon the type of accommodation choose by the customers. Now the applicant intends to change the modus operandi by issuing separate invoices to customers/guests for the services availed by them, instead of giving as packages. The services offered under different category are;

(a) providing accommodation;

(b) preparing and serving food and beverages;

(c) providing service of authorized guides;

(d) providing trekking accessories;

It is pointed out that these services are individually available to the guests, as such the guests have right to thoose any one olthe services. If the guests choose all the services, they will provide separate invoice. Accordingly, the applicant requested advance ruling on the following:

Tax liability under GST for tile tour packages, which are providing to guests by way of separate services like accommodation, serving food and beverages, service of authorized guides, trekking accessories etc against separate invoices.

The authorized representativei was heard. It is stated that charges for accommodation per guest is below threshold minimum to levy tax. The food and beverages are prepared in each of a the destinations, and are served to die guests. Since the accommodations are in far away places the guests are provided with a fixed !menu with chokes and accordingly the rates are also fixed. For this they will charge 5% GSTt vide Serial No.7 of Notification No.11/2017- Central Tax (Rate) dated 28.06.2017 as amendtd by Notification No.13/2018- Central Tax (Rate) dated 26.07.2018. For providing service of authorized guide, the applicant proposes to collect 18% GST.

The matter was examined in‘detall. The criteria for arriving threshold limit in the case of service of accommodation is not bard on the charges realized from guests on per head. As per SAC 9963, exemption is eligible only if services by a hotel, inn, guest house, club or campsite, by whatever name called, for residintial or lodging purposes, having declared tariff of a_unit_of  accommodation below one thousand rupees per day or equivalent (SRO.No.371/2017 Sl.No,14). As per S.R.O.No.370/2017 dtd.30-06-2017, ‘accommodation in hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes having declared tariff of a unit of accommodation of one thousand rupees and above but less than two thousand five hundred rupees per unit per daY or equivalent is taxable at 12% GST. If the declared tariff of unit accommodation is Rs.2500/- and above, but less. Ets.7500/- per unit per day or equivalent is taxable at 18% GST and the same above Rs.7500/- attract 28% GST. [Explanation:”declared tariff” includes charges for all amenities provided in the unit of accommodation (given on rent for stay) like furniture, air conditioner, refrigerators or any other amenities, but without excluding any discount offered on the published charges for such uniti.”]

It is stated that food and beverages are prepared in each of the destinations, and are served to the guests as per their request and separate invoices are to be issued. As per Notification No. 13/2018-Central Tax (Rate), dtd.26-07-2018, “supply, by way of or as part of any service, of goods, being food or any other article for human consumption or any drink, provided by a restaurant, eating joint including mess, canteen, whether for consumption on or away from the premises where such food or any other article for human consumption or drink is supplied, other than those located in the premises of hotels, inns, guest houses, dubs, campsites or other commercial places meant for residential or lodging purposes having declared tariff of any unit of accommodation of seven thousand five hundred rupees and above per unit per day or equivalent is taxable @ 5% GST without input tax credit. The applicant is providing service of authorized guide which attract 18% GST. As per Circular No.47/21/2018-GST dtd.08-06-2018, it has been clarified that the taxability of supply would have to be determined on a case to case basis looking at the facts and circumstances of each case. Where a supply involves supply of both goods and services and the value of such goods and services supplied are shown separately, the goods and services would be liable to tax at the rates as applicable to such goods and services separately.

In view of the observations stated above, the following rulings are issued:

Tax liability under GST for the tour packages, which are providing to guests by way of separate services like accommodation, serving food and beverages, service of authorized guides, trekking accessories etc. against separate invoices.

In case where a supply involves supply of both goods and services and the value of such goods and services supplied are shown separately, the goods and services would be liable to tax at the rates as applicable to such goods and services separately.

Download Judgment/Order

More Under Goods and Services Tax

Leave a Comment

Your email address will not be published. Required fields are marked *

Search Posts by Date

October 2020
M T W T F S S
 1234
567891011
12131415161718
19202122232425
262728293031