2018 (9) TMI 1335 – AUTHORITY FOR ADVANCE RULING, TAMILNADU – 2018 (17) G. S. T. L. 171 (A. A. R. – GST) – Catering Service – Applicant is engaged in supplying food and beverages at the canteen of their customers – Whether the supply of the applicant falls under 7(i) of Notification No. 11/2017 dated 28.06.2017 or under 7(v) of the said Notification? – Applicability of Notification No. 46/2017-C.T. (Rate) dated 14th November 2017.
–
Held that:- From the contracts furnished, it is seen that the Applicant supplies the food in the place of business of the Service Recipient. The charges are received from the companies monthly basis on the coupons collected. In short, it is deciphered that the Applicant is vested with management of the canteen facilities. The Applicant himself does not get paid for by the consumers of the food and beverages. The Recipient of the services are the companies who enter into contract with the applicant. Supply of food is classified under 9963.
–
It is
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
11/2017 -C.T. (Rate) dated 28.06.2017 and 9% SGST under Sl.No. 7(v) of G.O.(Ms) No 72 dated 29.06.2017 No. II(2)/CTR/532(d-14)/2017 for the period upto 26.07.2018 and from 27.07.2018 onwards at the rate of 2.5% CGST under SI.No. 7(i) of the Notification No. 11/2017-C.T. (Rate) as amended and at the rate of 2.5% SGST under SI.No. 7(i) of G.O.(Ms) No 72 dated 29.06.2017 No.II(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. – TN/09/AAR/2018 Dated:- 30-8-2018 – MS. MANASA GANGOTRI KATA AND S. VIJAYAKUMAR, MEMBER Note. Any appeal against the advance ruling order shall be filed before the Tamil Nadu State Appellate Authority for Advance Ruling, Chennai under Sub-section (1) of Section 100 of CGST ACT/TNGST Act 2017 within 30 days from the date on which the ruling sought to be appealed against is communicated. At the outset,
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
cant 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. The applicant has submitted that, on interpretation of Notification 11/2017CT(R) dated 28/06/2017 as amended, they assume that GST for the catering services rendered by them is 5%. 3. The Authorised Representative of the Applicant was personally heard in the matter on 08.05.2018. In the first hearing, the Applicant submitted, that they enter into contracts with companies on whose rent free premises where food is supplied, no payment is taken from employees of the company. They submitted that it is a catering service and eligible for SI.No. 7(i) of Notification No. 11/17 as amended. In the subsequent hearing, the applicant submitted a copy of
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
the Management using the Applicant's manpower. This will be served to the employees, by collecting coupons on behalf of the client. Based on the coupons collected, the Applicant will give a bill and payment will be made by the company to the Applicant on monthly basis. 5. The Advance Ruling is sought on the applicability of Notification No. 46/2017-C.T. (Rate) dated 14th November 2017 to the case at hand. In the case at hand, the Applicant is engaged in supplying food and beverages at the canteen of their customers. From the contracts furnished, it is seen that the Applicant supplies the food in the place of business of the Service Recipient. The charges are received from the companies monthly basis on the coupons collected. In short, it is deciphered that the Applicant is vested with management of the canteen facilities. The Applicant himself does not get paid for by the consumers of the food and beverages. The Recipient of the services are the companies who enter into contract w
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
ever name called to serve alcoholic liquor for human consumption. 6 – (v) Supply, by way of or as part of any service or in any other manner whatsoever in outdoor catering wherein goods being food or any other article for human consumption or any drink (whether or not alcoholic liquor for human consumption), as a part of such outdoor catering and such supply or service is for cash deferred payment or other valuable consideration. 9 – The tax rates under Sl.No. 7 came under Scrutiny and the same was taken up by the council for consideration. Tax Structure of different categories of Restaurants, with a view to their possible rationalization / reduction was mandated to be examined. The same was examined at the 23rd Meeting of the GST Council held on 10th November 2017. The council discussed the various aspects involved in respect of the rate of tax on the supply is reproduced below: 65.28. The Hon'ble Chairperson proposed a tax rate of 18% with input tax credit on the outdoor catering
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
e food, etc. was bought by the customer. Advisor, Finance, Punjab also supported this suggestion. He stated that several people only did catering business and theoretically, they could claim that they had set up a restaurant to cater to a function at a venue. He suggested that rate of tax for outdoor catering where only food was being provided should be kept at 5%. The Hon'ble Chairperson observed that low rate of tax for one sector would lead to demand for lowering tax for other services sector also. The Hon'ble Minister from Uttar Pradesh proposed to keep a uniform tax rate of 12% without input tax credit as it would be bad optics to charge tax at the rate of 18% on outdoor catering and 5% on restaurant. The Secretary stated that this proposal would not be acceptable to the trade. The Hon'ble Minister from Assam did not support this proposal and stated that this would lead to increase in prices. 65.29. Keeping in view the discussion as above, the Council agreed to apply t
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
luable consideration, provided by a restaurant, eating joint including mess, canteen, whether for consumption on or away from the premises where such food or any other article for human consumption or drink is supplied, other than those located in the premises of hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes having declared tariff of any unit of accommodation of seven thousand five hundred rupees and above per unit per day or equivalent. Explanation.- declared tariff includes charges for all amenities provided in the unit of accommodation (given on rent for stay) like furniture, air conditioner, refrigerators or any other amenities, but without excluding any discount offered on the published charges for such unit. 2.5 Provided that credit of input tax charged on goods and services used in supplying the service has not been taken [Please refer to Explanation no. (iv)]. ; And no amendment was made in Sl.No 7(v) of Notifi
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
ions and decisions also clearly differentiate a restaurant/ canteen / mess run independently and the services extended by the applicant which tall under the category' of outdoor catering. The very likely scenario of 'Outdoor Caterer' trying to call himself as a 'restaurant' has been discussed and the decision to lower the tax rate only to restaurants has been taken by the council. Therefore, the supply of food by the applicant in the premises of client, whether prepared in that place or brought and served is more appropriately covered by the description at Sl.No. 7(v) of the Notification No. 11/2017 -C.T. (Rate) dated 28.06.2017 and is liable to tax at 9% CGST and 9% SGST. 5.3 GST Council in the 27th Council Meeting held on 4th May 2018, discussed and on 21.07.2018, the following decision as given in the press note was taken and the same is reiterated below: 18. Rationalize entry relating to composite supply of food and drinks in restaurant, mess, canteen, eating jo
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
e located in the premises of hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes having declared tariff of any unit of accommodation of seven thousand five hundred rupees and above per unit per day or equivalent. Explanation 1.- This item 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. 2.5 Provided that credit of input tax charged on goods and services used in supplying the service has not been taken [Please refer to Explanation no. (iv)] From the above, it is clear that the instant case of the applicant is making supply of services in the dining space of the industrial units and offices which is squarely covered in the Explanation 1 to Sl.No 7(i) and SI
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =