The Telangana bench of the Authority for Advance Rulings (AAR), while considering an application for advance ruling by a supplier of boarding and lodging to the students undergoing training under healthcare related vocational program, has held that are two distinct supplies in this contract one for accommodation and the other for food.
The applicant M/s. Healersark Resources Private Limited sought for a clarification regarding their GST liability as they are charging only Rs.9000/- per month which amounts to Rs.300/- per day for both accommodation and food as a composite supply. They claimed that the supply of food is ancillary to accommodation and accommodation being the principle supply, hence, their service is exempt from tax in view of this entry.
A bench comprising Mr. S V Kashi Viswesara Rao (State Member) and Mr. B Reghu Kiran (Central Member) has observed that “As seen from the information serviced by the applicant, the rent is fixed at the rate of Rs.3500/- whereas the food is charged at Rs.5500/- as per the head count or actual number of candidates. This means that the price is variable to the extent of food supplied and this is not a single price the customer pays, no matter how much of the package is actually received. For the above reason, the two supplies are not integral to one another.”
Concluding the order, the bench held that “There are two distinct supplies in this contract one for accommodation and the other for food. b. The SAC for supply of accommodation is ‘99631’ and as enumerated at serial no. 14 of Notification No. 12/2017 dt: 28.06.2017 this is exempt in the present case as per day rent is below Rs.1000/-. c. The SAC for supply of food is ‘99633’ and taxable at the rate is: i. 6% CGST & SGST each with ITC upto 14.11.2017. ii. 2.5% CGST & SGST each without ITC thereafter from 15.11.2017 onwards.”
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