GST INDIA DAILY

ADVANCE RULING SERIES – PART 7

AAR.NO: GUJ/GAAR/R/25/2020 DT: 09.07.2020

M/S. NIMBA NATURE CURE VILLAGE, THE UNIT OF M/S. OSWAL INDUSTRIES LIMITED

FACT OF THE CASE:

M/s. Nimba Nature cure village is a unit of M/s. Oswal Industries Limited. The applicant has stated that this is one of the largest Naturopathy centers in India and offers physical, psychological and spiritual health overhaul with the help of power of nature.

The applicant has further stated that they provide different types of wellness facility at Nimba such as Naturopathy, Ayurveda, Yoga and mediation, Physiotherapy and special therapy.

The applicant has stated that some of the hallmarks of corporate wellness program at Nimba are physical activity, tobacco cessation, stress management and back are programs. Such wellness facilities are provided for different types of diseases.

The applicant has stated that such wellness facilities are provided with the help of highly qualified professionals doctors in the field of naturopathy, researchers, and support staff. Nimba Nature cure helps to heal through alternative therapies from traditional Chinese acupuncture treatment to ancient Egyptian cupping therapy, from reflexology to acupressure therapy and even hot stone therapy.

The applicant has further stated that in pre-GST regime, the applicant had received letter from department dated 10.03.2015 for clarification regarding registration under service tax and on the basis that letter the applicant has been enjoying exemption vide Notification No.25/2012.

The applicant has further stated that it is clear that an institution to qualify clinical establishment since the following conditions satisfied:

• Diagnosis or treatment or case for illness, injury, deformity, abnormality or pregnancy
• The diagnosis, treatment or care should be through recognized system of medicine in India
• The same can either be an independent entity or part of any establishment so as to provide the said service.

DISCUSSIONS AND FINDINGS:

At the outset, we have to find whether the stated services mentioned by the applicant is exempt under GST Act or not?

Before delving into the aspect of applicability of notification, we find it prudent to examine whether the services fall within the classification as mentioned at S.No:74 of the said notification.

The package offered by the applicant, as evident from their website indicates that the therapy offered by them is strictly on a residence basis. The same is evident from the fact that the consideration is solely dependent on the type of room opted by his customer.

The package indicates that the total consideration mainly revolves around two factors viz. 1) Type of Room and 2) Whether single or double occupancy.

THIS FACTS CREATES AN IMPRESSION THAT STAY IS MANDATORY AND THE CHARGES OF STAY DEPEND ON THE ABOVE FACTOR. THUS, WE OBSERVE THAT THE ELEMENT OF ACCOMMODATION BECOMES THE PRIMARY ACTIVITY IN THE ENTIRE PACKAGE.

So, in view of section 8(a) above, it can be seen that a composite supply comprising of two or more supplies, one of which is a principal supply, shall be treated as a supply of such principal supply. Therefore, in instant case, the composite supply of services would be treated as supply of accommodation of service falling under Heading 9963. Further the supply of service namely “Accommodation food and beverage service” and the same levy under GST Act and there is no exemptions under this notification.

Now, we come to the question for advance ruling raised by the applicant. On going through the Notification No.12/2017 – Central Tax Dt: 28.06.2017, entry no.74 of the said notification has been full filled that services by way of health care services by a clinical establishment.

However, the supply of service provided by the applicant, which is composite supply, has been clarified under the Heading 9963 [Room or Unit accommodation service provided by Hotels, Inn, Guest house, Club and the like.

Therefore, we conclude that exemption available at Entry No.74 of Exemption Notification No.12/2017 – Central Tax Dt: 28.06.2017 is not applicable to the applicant.

STAY TUNED TO THE RIDE OF GST WAVE

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MANIMARAN KATHIRESAN