Roy’s Institute of Competitive Examination Private Limited Vs Principal Commissioner of Service Tax (CESTAT Kolkata)
CESTAT Kolkata held that demand of service tax on account of non-payment of service tax under commercial training and coaching services on hostel fees received for non-residential courses, is not sustainable and hence we set aside the same. Accordingly, demand set aside and appeal allowed.
Facts- The present appeal has been filed against the Order-in-Original dated 24.11.2015 passed by the Commissioner of Service Tax, wherein, the service tax amounting to INR 1,25,29,172/- along with interest and equal amount of tax as penalty has been confirmed. Notably, regarding the demand of service tax of Rs.35,86,321/- confirmed in the impugned order on account of non-payment of service tax under commercial training and coaching services on hostel fees received for non-residential courses.
Conclusion- Vide, Circular No DOF/334/1/2007-TRU dated 28.02.2007, it has been clarified that the residential accommodation such as hotels, hostels, boarding houses, holiday accommodation, tents, camping facilities have been specifically exempted from service tax. In view of the above clarification, it becomes absolutely clear that standalone accommodation service in a hostel for residential purposes would squarely fall under the exclusion clause provided under renting of immoveable property services defined under section 65(90a) of the Finance Act. In view of the above, we hold that the stand-alone hostel charges collected for nonresidential courses, have no connection with Commercial Training and Coaching services as defined under section 65(105)(zzc) of the Finance Act, in as much as, even if any student, who do not avail this service, would continue to avail the course offered by the Appellant and therefore, the question of payment of service tax does not arise.
