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GST-on-Canteen-or-Outdoor-Catering-Services

 

GST on Canteen or Outdoor Catering Services

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The Circular No. 28/02/2018-GST dated 08.01.2018 as amended vide Corrigendum dated 18.01.2018 was issued to clarify GST rates applicable on catering services i.e. supply of food or drink in a mess or canteen in an educational institute and Order No 02/2018-Central Tax dated 31.03.2018 was issued to clarify GST rate on supply of food and/or drinks by the Indian Railways or Indian Railway Catering and Tourism Corporation Limited or their licensees, in train or platforms (static units) is withdrawn w.e.f  27.07.2018.

 

CBIC notifies CGST rates of various services vide Notification No. 13/2018-Central Tax (Rate) Dated: 26th July 2018 with effect from 27th of July, 2018 as recommended by Goods and Services Tax Council in its 28th meeting held on 21.07.2018. The rates are as under-

 
Canteen services provided in factory, school, institutions etc. liable to tax @ 5% [Notification No. 13/2018-Central Tax (rates)]
  • There were confusions as to the applicable rate of tax on the services supplied by contractor at fixed premises (factory, school, college, office) on regular basis.
  • Explanation has been inserted in the Notification No. 11/2017-Central Tax (rates) against serial number 7 to clarify that 5% rate of tax would be applicable when-
    1. The services are provided by any person based on contractual engagement at canteen, mess, cafeteria or dining space of institutions such as school, college, hospital, industrial unit, offices etc.
    2. The services are provided by such institutions to the person availing services at such institutions.
  • Consequent to such amendment, the supplies by contractors at institutions (whether to institution or persons directly availing the services) and by institutions to the persons would be covered under 5% rate of tax.
  • The supplier shall not be entitled to get the credits of the same.
  • However, the amendment does not cover such cases where supply is event based or occasional in nature. In such cases, the applicable rate of tax would be 18%.
 
Catering services at Railway liable to tax @ 5% [Notification No. 13/2018-Central Tax (rates)]
  • Catering services provided by following categories of persons-
    1. Indian Railway
    2. IRCTC
    3. Licensees of above categories of persons
  • The services may be provided either in the trains or at platforms.
  • The supplier shall not be entitled to get the credits of the same.

 

Outdoor catering services liable to tax @ 18% [Notification No. 13/2018-Central Tax (rates)]
  • The scope of outdoor catering services have been clarified to provide that supply, by way of or as part of any service, of goods, being food or any other article for human consumption or any drink, which are event based or occasional in nature when provided at:
  1. Exhibition halls
  2. Events
  3. Conferences
  4. Marriage halls; and
  5. Other outdoor or indoor functions

 

When is GST Payable-

For making the payment of GST for the catering business, the earliest of the date given below should be considered as the time of supply.

  • When the invoice is issued to the customer; or
  • When the invoice is not issued to the customer within 30 days starting from the date of supply of service; or
  • Date of receipt of the services in the service recipient’s books of account



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