Hostel Accommodation With Food is not Composite Supply if Residents Can Get Food Elsewhere: AAAR
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- Last Updated on 15 July, 2023
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Case Details: Mody Education Foundation, In re - [2023] 152 taxmann.com 281 (AAAR-Rajasthan)
Judiciary and Counsel Details
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- Pramod Kumar Singh & Ravi Jain, Member
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Ritul Patwa, CA (DR) for the Appellant.
Facts of the Case
The Appellant was running a CBSE affiliated school and it was planning to provide Hostel Accommodation to students along with serving meals. It filed an application for advance ruling to determine whether supply of hostel facility and providing food would be treated as composite supply. The Authority for Advance Ruling held that the supply would be treated a mixed supply and it filed appeal before the Appellate Authority for Advance Ruling (AAAR).
AAR Held
The AAAR observed that cafeteria in the building for day scholars proved that food service would be independent and can be supplied separately. Any student can live in hostel without availing other ancillary service like food but these services may be availed to make stay more comfortable. A hostel inhabitant can avail these other services from any other source as well. The hostel accommodation could be a principal supply but ancillary food service cannot arise naturally with it, and therefore, would not be bundled in normal course of business.
Thus, it was held that hostel accommodation along with food would be treated as mixed supply and not composite supply and as per Section 8(b) of CGST Act, 2017, in case of mixed supply of accommodation and food, highest rate of both would be applicable.
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