In re GVK Accommodation (GST AAR Tamilnadu)
Whether the hostel accommodation extended by the Applicant would be eligible for exemption
FULL TEXT OF THE ORDER OF AUTHORITY FOR ADVANCE RULING, TAMILNADU
M/s GVK ACCOMMODATIONS, #19, Pillayar Koji Street, Katoor, Ramnagar, Coimbatore 9(hereinafter referred to as ‘The Applicant’).The Applicant is running a ladies residential hostel for college students and working people.
2.1. The Applicant has submitted the copy of application in Form GST ARA – 01 and also submitted a copy of challan evidencing payment of application fees of Rs.5,000/- each under sub-rule (1) of Rule 104 of CGST Rules 2017 and SGST Rules 2017.
2.2. The Applicant submitted that they have taken the premises on rent and they further let it out for college. female students and working women as. hostel accommodation, since most of the students and working people travel far and wide from their remote villages. The applicant herein also provides food as part of hostel services at nominal rates. But, the choice is given to the inmates to opt for lodging or for boarding and lodging. The Applicant has its own in house kitchen facilities with their own staff to provide homely, tasty and healthy food for the inmates. The total charges collected for boarding/ boarding and lodging ranges between Rs. 40/-per day to Rs. 280/ – per day. Thus, the monthly tariff per student or per inmate ranges between Rs. 1,200/ to Rs. 6,500/- per month per inmate. They provide single room occupation, or double room sharing, or dormitory style of accommodation and rates vary accordingly.
2.3. In their interpretation of law/facts in respect of the questions raised, the Applicant submitted that
> They have licence to run the residential hostel for boarding and lodging under Section 5 of the Tamil Nadu Hostels and Home for Women and Children (Regulation) Act, 2014 [hereinafter referred to as the “Hostel Regulation Act”]
> Section-2 (e) of the ‘Hostels Regulation Act’ defines “Hostel” or “Lodging House” to mean ‘a building in which accommodation is provided for women or children or both either with boarding or not.’ The term ‘Home for Women & Children” is defined in section-2 (d) to mean institution, by whatever name called, established or maintained or intended to be established or maintained for the reception, care, protection for welfare of women or children or both’; On the other hand, the term ‘residential hotel’ is defined in Section -2 (14) of The Tamil Nadu Shops and Establishments Act, 1947 to mean ‘any premises in which business is carried on bonafide for the supply of dwelling accommodation and meals on payment of a sum of money to a traveler or any member of the public or class of the public’; Thus, the `hostel’ accommodation which falls within the purview of the ‘Hostels Regulation Act’ cannot he equated with that of a ‘hotel accommodation which falls within the realm of The Tamil Nadu Shops & Establishments Act, 1947 by any stretch of imagination.
> Under the erstwhile Service Tax regime, the ‘services by way of renting of residential dwelling for use as residence’ was included in the negative list under S.No.(m) of Section 661) of the Finance Act 1994. Similarly, no VAT was leviable for supplying food to inmates, being an incidental activity to the activity of accommodation and reliance was also made on the Hon’ble Andhra Pradesh High Court decision in the case of Bharatiya Vidya Bhavan’s Residential Public School v. State of Andhra Pradesh.
> Under the Exemption Notification, Entry No. 12 of Exemption Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 ‘similar entry 13 of Exemption Notification No.9/2017 Integrated Tax-Rate dated 28.06.2017 reads as follows:
