Gujarat AAR holds that supply of food & beverages at in-house factory canteens of customers / clients constitutes “outdoor catering service” liable to GST at 18%.
Perusing the agreement, AAR notes that applicant is engaged for running of canteen for recipient’s workers / employees, where the menu & rates thereof is decided by such recipient.
Applicant provides catering service to recipient and not to its workers / employees and hence, is not in nature of service provided by a restaurant, eating joint including mess, canteen, observes AAR.
In view thereof, rules out applicability of TRU Circular No. 28/02/2018-GST which had clarified that 5% GST would apply to supply of food or drink by a mess or canteen irrespective of whether service is provided by educational institution itself or by outside contractor; Refers to Allahabad HC decision in Indian Coffee Workers’ Co-op. Society Ltd.
Wherein the Court had observed that taxable catering service cannot be confused with who has actually consumed food, edibles and beverages which are supplied by assessee.
Consequently, holds that, “the service of catering is provided by the applicant to the recipient and the fact that the meal, snacks, tea etc. are consumed by the workers / employees of the recipient would not alter the nature of service provided by the applicant.”.
Accordingly, holds that supply of services by applicant is covered under Sr. No. 7(v) of Notification No. 11/2017-Central Tax / State Tax (Rate) : Gujarat AAR