Order Date: – 03 June 2022

Facts:

• The Applicant, M/s. Healersark Resources Private Limited, is in the business of providing boarding and lodging to the students undergoing training under healthcare related vocational program under Deendayal Upadyay Grameen Kaushalya Yojana (DDU-GKY).
• The applicant states that he is charging only Rs.9000/- per month which amounts to Rs.300/- per day for both accommodation and food as a composite supply. Further, that the supply of food is ancillary to accommodation and accommodation being the principle supply, hence he claims that their service is exempt from tax in view of this entry.

Issue

• Whether the service provided by them falls under serial no. 14 of Notification No. 12/2017 dt:28.06.2017 as they are charging only Rs.300/- per day. The exemption entry reads as under:

        “Services by a hotel, inn, guest house, club or campsite, by whatever name called, for residential or lodging purposes, having “value of supply” of a unit of                accommodation below or equal to one thousand rupees per day or equivalent.

Order

• The authorities observed that 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.
• The Hon’ble High Court of Kerala in the case of Abott Health Care Pvt. Ltd., (2020) 74 GSTR 37 (Kerala) held that a composite supply must take into account supplies as affected at a given point in time on “as is where is” basis. In the present case this condition is not fulfilled. Therefore there are two distinct supplies one for accommodation and the other for food.

Key questions and answers

1. What is the applicable GST SAC and GST rate for the supply of service described in this application?

    Answer:  There are two distinct supplies in this contract one for accommodation and the other for food. The SAC for supply of accommodation is ‘99631 ad is         exempt in the present case as per day rent is below Rs.1000/- The SAC for supply of food is ‘99633’ and taxable at  the rate is:

• 6% CGST each with ITC upto 14.11.2017.
• 2.5% CGST & SGST each without ITC thereafter from 15.11.2017 onwards. 

   2. Is it a composite supply or a mixed supply?

   Answer: There are two distinct supplies in this contract one for accommodation and the other for food.

   3. Whether the service is exempted vide Notification No. 12/2017 – CT(Rate) dated: 28.06.2017?

   Answer:  No