AAR says no to GST Exemption on Ladies Hostel accommodation services [Read Order]

The Authority for Advance Ruling (AAR Tamilnadu) in the matter of M/s. Vrindavan Ladies Hostel has held that No GST Exemption on Ladies Hostel accommodation services.

The applicant, M/s. Vrindavan Ladies Hostel, No.356, Kamarajar Road, Varadarajapuram, Coimbatore – 641015 (hereinafter referred to as ‘The Applicant’), is unregistered with GST. The Applicant is running a ladies residential hostel for college students and working people.

The Questions and Ruling are as follows:

(1) Whether the hostel and residential accommodation extended by the Applicant hostel would be eligible for exemption under Entry 12 of Exemption Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 and under the identical Notification under the TNGST Act, 2017 and also under Entry 13 of Exemption Notification No.9/2017 -Integrated Tax-Rate dated 28.06.2017 as amended?

(2) Whether the Applicant hostel is eligible for exemption under SI. No. 12 of Notification 12/2017 (CT-Rate) dated 28.06.2017 as amended would at all be required to take registration under the GST Enactments by virtue of the Exemption Notifications as aforementioned and also under the provisions of Section 23 of the CGST/TNGST Act, 2017?

(3) Whether any specific tariff entry is applicable to hostels under the Tariff Notification, in the event of requirement of registration?

(4) Whether, in the event of the hostel accommodation being an exempt activity, the incidental activity of supply of in-house food to the inmates of the hostel would also be exempt being in the nature of a composite exempt supply?

(5) Whether the judgement of the Division Bench of the Hon’ble Karnataka High Court in the case of Taghar Vasudeva Ambrish vs Appellate Authority for Advanced Ruling, Karnataka reported in Manu/KA/0327/2022 is applicable to the facts of the applicant?

RULING

(1) The services by way of providing hostel accommodation supplied by the Applicant are not eligible for exemption under Entry 12 of Exemption Notification No. 12/2017 CT (Rate) dated 28.06.2017 and under the identical Notification under the TNGST Act, 2017, and also under Entry 13 of Exemption Notification No. 09/2017-IT(Rate) dated 28.06.2017, as amended.

(2) The Applicant is required to get themselves registered in the state of Tamilnadu if their aggregate turnover in a financial year exceeds twenty lakh rupees.

(3) The supply of services by way of providing hostel accommodation falls under Tariff heading 9963 and is taxable @9% CGST + 9% SGST under Sl.No. 7(vi) of the Notification No. 11 /2017, Central Tax (Rate), dated 28.06.2017, as amended vide Notification No. 20/2019 -Central Tax (Rate) dated 30.09.2019.

(4) The activity of supplying in-house food to the inmates of the hostel amounts to providing services in a composite manner and the hostel accommodation services provided by the Applicant, being the principal supply, which is taxable @18%, is the tax rate for the composite supply provided by them.

(5) No ruling is issued, as the question put forth by the applicant does not fall under the scope of Section 97(2) of the CGST Act.

For Official Ruling Download PDF Given Below: