Whether the daily accommodation services ranging from Rs.300 to Rs.500 per bed are eligible for exemption under Notification No.12/2017-Central Tax?

PJ/Case Law/2020-2021/3569

Srisai Luxurious Stay LLP (GST AAR Karnataka) Advance Ruling No. KAR ADRG 20/2020 dated 31.03.2020

Brief Facts-The applicant is a Limited Liability Partnership concern not registered under the provisions of the Goods and Services Act, 2017. The applicant states that engaged in the business of developing, running, maintaining, operating, setting up, owning, dealing in, buying, selling, renting, subletting, and managing paying guest accommodations, service apartments, flats aimed to suit all type of customers by whatever name called.

Issue-i. Whether the daily accommodation services ranging from Rs.300 to Rs.500 per bed are eligible for exemption under Notification No.12/2017-Central Tax?
ii. Whether the monthly accommodation services ranging from Rs.6,900 to Rs. 12,500 per bed is eligible for the exemption under Notification No. 12/201 7- Central Tax?
iii. Whether the said notification would be applicable if LLP decides to charge additional charges for the extra-facilities opted by the inhabitants in addition to the facilities that are currently included in the tariff received by the inhabitants but the overall price would be less than the present exemption limit of Rs. 1000 per day per Unit?

Applicant’s Contention- The tariff chart of the applicant is as follows-

Type of tariff (per unit) 1 unit = 1 bed	Range From to (in Rs.)
Monthly Tariff	6,900 to 12,500
Daily Tariff	300 to 500
Maximum no. of beds in a room	Three beds to one bed

The applicant states that hostel accommodation is treated at par with accommodation of hotels, inns, guest houses, etc., and accordingly chargeable at different GST rates based on the daily tariff per unit. However, it is exempted vide Exemption Notification No. 12/2017 – Central Tax (Rate) vide entry 14 where services by a hotel, inn, guest-house, club or campsite by whatever name called, for residential or lodging purposes, having a declared tariff of a unit of accommodation below one thousand rupees per day or equivalent. SAC Code 996311.
The LLP is yet to commence the business. Post clarification on the exemption of GST to their nature of business, compliance under GST Act would be accordingly carried out.
The LLP aims to provide boarding and lodging facilities. Along with this, LLP will also provide ancillary services to the above only to the inhabitants like Meals which includes breakfast, lunch and dinner, Fully furnished rooms, Round the clock security guards at the premises, Housekeeping facilities, Washing Machine facilities, Television in each room, Internet facilities (WIFI available) and Vehicle parking facilities.

Reasoning by authority and Judgement- Supply of services by a hotel, inns, guest houses, clubs or campsite or any other commercial place, by whatever name called, for residential purposes would be exempted if the declared tariff of a unit of accommodation is below Rs. 1,000 per day or equivalent, as per entry no. 14 of the Notification No. 12/2017 -Central Tax (Rate) dated 28.06.2017. If it exceeds Rs. 1.000-00 per day or equivalent then the services become taxable as per entry no.7 of the Notification No. 11/2017 – Central Tax (Rate) dated 28.06.2017.
The daily accommodation services ranging from Rs.300 to 500 per bed are eligible for exemption under Notification No. 12/2017- Central Tax (Rate) dated 28.06.2017
The monthly accommodation service ranging from Rs.6,900 to Rs. 12,500 per bed is eligible for exemption under Notification No. 12/2017- Central Tax (Rate) dated 28.06.2017.
If the applicant charges additional charges for extra facilities opted by the inhabitants in addition to the facilities that are currently included in the tariff received by the inhabitants but the overall price would be less than the present exemption limit of Rs. 1,000-00 per day per unit, then the same is liable to tax at the rates applicable to them as they are independent supplies, if they do not belong to the Group 9963. If they belong to the Group 9963, then the same are exempt as per entry no. 14 of the Notification No. 12/2017- Central Tax (Rate) dated 28.06.2017.

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PJ/Case Law/2020-2021/3569

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