Supply of food & beverages in office premises taxable at 5% GST from July 27, 2018 onward: AAR

Categories: Advance Ruling
No Comments

Facts: M/s Goodwill Industrial Canteen, has stated to render catering services to various companies. They prepare food in their place and supply to the employees of their clients/companies. The said companies provide them the rent-free space to distribute the food to the employees of the companies. They purchase materials and use their own manpower in cooking and distributing food.

Issue Involved: Clarification is sought regarding applicable GST to the outdoor catering services rendered by the Applicant to their clients.

Held: The Hon’ble AAR of Tamil Nadu vide Order No. 9/AAR of 2018 dated August 30, 2018 held that:

The services of the Applicant of supplying food and beverages on the premises of industrial unit/office, which are on the terms of the contract with M/s Kone Elevators and such other contracts, are liable to tax at the rate of 9% CGST under Sl .No. 7(v) of Notification No. 11/2017 – Central Tax (Rate) dated June 28, 2017 (“Notification No. 11”) and 9% SGST under Sl. No. 7(v) of G.O.(Ms) No 72 dated June 29, 2017 No. ll(2)/CTR/532(d-14)/2017 for the period upto July 26, 2018; and

From July 27, 2018 onward, the services of the Applicant are taxable at the rate of 2.5% CGST under Sl. No. 7(i) of the Notification No. 11 as amended and at the rate of 2.5% SGST under Sl. No. 7(i) of G.O.(Ms) No 72 dated June 29, 2017 No.ll(2)/CTR/532(d-14)/2017 as amended subject to the condition that credit of input tax charged on goods and services used in supplying the services are has not been taken read with Explanation (iv) of said Notifications.

Our Comments: It may be noted that Notification No. 11/2017 was amended vide Notification No. 13/2018 – Central Tax (Rate) dated July 26, 2018 w.e.f. July 27, 2018 and according to Explanation 1 in amended Sl. No. 7(i) of the notification, entry pertaining to restaurant services taxable at 5% without credit now includes such supply at a canteen, mess, cafeteria or dining space of an institution such as a school, college, hospital, industrial unit, office, by such institution or by any other person based on a contractual arrangement with such institution for such supply, provided that such supply is not event based or occasional. Further, entry no. 7(v) of Notification No. 11 dealing with applicable rate of GST on outdoor catering services has been substituted to cover “supply, by way of or as part of any service, of goods, being food or any other article for human consumption or any drink, at Exhibition Halls, Events, Conferences, Marriage Halls and other outdoor or indoor functions that are event based and occasional in nature”.


Citation: [2018] 97 451 (AAR – TAMIL NADU)