Classification of service— In the instant case, the applicant has stated that they are into the business of hospitality providing boarding, lodging facilities and such other services to M/s. Apollo Med Skills Limited (AMSL). 

This authority find that the applicant has entered into an agreement with AMSL based on which the applicant undertakes supply of hospitality services to the students of the up-skilling programs conducted by AMSL. The issue before us to be decided is whether the 'services supplied by the applicant is a “Business Support Service-Other' classifiable under SAC 998599 & therefore the questions raised cannot be ruled” as opined by the SGST Member or “the supply of the applicant is a 'composite supply' with the principal supply being 'provision of accommodation'” as held by the CGST Member.

In the case at hand, the applicant has entered into lease agreements with third party service providers and in one such agreement entered into with AMET University( Academy of Maritime Education and Training) available on record, it is seen that the applicant has entered into the contract for lease of the property owned by AMET for the purpose of 'running Hostels and providing accommodation for the students/Candidates, and/or general office purposes and lawful uses ancillary to any of the foregoing principle uses'. Thus, it is clear that the applicant, enters into agreement with third parties, in their own capacity, to enable themselves to provide the 'Hospitality service', which establishes that the activities of the applicant are independent in nature. Also, from the scope, language and the terms and conditions of the agreement of the applicant with AMSL, it is evident that the applicant is entrusted to provide the 'Hospitality Services' in the capacity of an Independent contractor only and not as an agent of AMSL.

In the case at hand as has been observed that, the per day equivalent consideration for the composite supply of Hospitality services when extended in Chennai Region is Rs. 300/- and for regions out of Chennai the per day equivalent consideration is Rs. 250/- which are below one thousand rupees stipulated for per day. Therefore, the applicant is eligible for the said exemption entry.

Held that— The supply envisaged in the agreement entered with AMSL is a composite supply with 'Provision of Accommodation-SAC 9963' as Principal Supply.

The exemption at SI.No. 14 of Notification No. 12/2017-C.T.(Rate) dated 28.06.2017 is applicable to the case in hand.