In re ISPRAVA Hospitality Private Limited (GST AAR Maharashtra)
‘Pattern of renting’ in relation to usage of the property provides the context’ or ‘perspective’ in determination of unit of accommodation. In a hotel, a room constitutes ‘a unit’ whereas in a hostel, a bed may constitute ‘a unit’, as tariff is also declared accordingly. In the present case the applicant, themselves have mentioned that, rent is proposed to be offered to clients on per day basis for entire villa. The two different clients will not be able to book the same villa and there will be no option of booking particular room of the villa. Interested clients need to book the entire villa. Thus, it is crystal clear that villa per say is ‘indivisible unit’ in applicant’s business parlance, and the declared tariff is only for the villa as a whole. Hence, the expression “per unit” in the present case will be the entire villa.
FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING,MAHARASHTRA
PROCEEDINGS
(Under Section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017)
The present application has been filed under Section 97 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017 [hereinafter referred to as “the CGST Act and MGST Act” respectively ] by ISPRAVA Hospitality Private Limited, the applicant, seeking an advance ruling in respect of the following question.
1. What is the meaning of “Per Unit” as specified under Chapter, Section or Heading-9963 under entry no. 7 of the Notification No. 11/2017-Central Tax (Rate) dated 28 June 2017?
At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST 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 MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, the expression ‘GST Act’ would mean CGST Act and MGST Act.
2. FACTS AND CONTENTION – AS PER THE APPLICANT
The submissions made by the applicant is as under:-
2.1 M/s ISPRAVA Hospitality Pvt. Ltd. (Applicant) is engaged in the activity of giving Luxurious Villa on rent to its clients in Goa and Tamil Nadu and intending to initiate the said business in Maharashtra. Each Villa consists of two to six rooms and is offered to clients on per day basis for entire Villa.
2.2 The per day rent of an entire villa will be more than seven thousand five hundred at any given point of time in a year. However, if one may calculate the cost per room per villa then at any given point of time, it would be less than seven thousand five hundred.
2.3 Two different clients will not be able to book the same Villa for the same day and time and there will be no option of booking particular rooms of the Vila, interested clients need to book entire villa.
4. As per Notification No. 11/201 7-C.T. (Rate) dated 28.06.2017, as amended from time to time, service provided by applicant falls within the ambit of HSN Code 9963 which appears under Entry No. 7 of the said notification.
5. In the aforesaid notification, supply value of Per Unit of accommodation decides the rate for levy of GST. If the supply value per unit of hotel accommodation is between one thousand and and seven thousand five hundred rupees then GST at the rate of 12% [6% (CGST) and 6% (SGST)] is applicable and if the supply value of per unit of accommodation is more than seven thousand five hundred value, then GST at the rate of 18% (9% (CGST) and 9% (SGST)] is applicable.
6. Since rate per unit of hotel accommodation plays vital role on determining the rate applicable, it is pertinent to know the meaning of the term Per Unit’, since the said term is not defined under the CGST Act. 2017. Applicant would like to understand whether the either entire Villa shall be considered as one unit or each room available in the Villa shall be consider as one unit.
