In Re : Ismail Ahamad Soofi
GST
2018 (11) TMI 1012 – AUTHORITY FOR ADVANCE RULING – MAHARASHTRA – 2018 (19) G. S. T. L. 546 (A. A. R. – GST)
AUTHORITY FOR ADVANCE RULING – MAHARASHTRA – AAR
Dated:- 9-7-2018
GST-ARA- 05/2018-19/B-61
GST
SHRI B.V. BORHADE, AND SHRI PANKAJ KUMAR, MEMBER
PROCEEDINGS
(Under section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017)
1.1 The present application has been filed under section 97 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017 [hereinafter referred to as “the CGST Act and MGST Act”] by ISMAIL AHAMAD SOOFI (CHEFS CORNER), the applicant, seeking an advance ruling in respect of the following question.
Whether the catering services provided by the Applicant under B2B Model and B2C Model are to be classified as canteen/restaurant services under Entry. No. 7(i) of the Notification No. 11/2017 dated 28th June 2017 as amend
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plicant enters into contract with companies for providing catering services to its employees by following either Business to Business (B2B) Model or Business to Consumer (B2C) Model.
2.3 Under B2C Model, the Applicant enters into contract with the companies to provide catering services to the employees of the companies. In such type of the contracts, the amount of consideration is paid by the employees directly to the Applicant as per the agreed schedule, which is generally on monthly basis. All the risk with respect to the excess food is borne by the Applicant.
2.4 Under B2B Model, the Applicant enters into contract with the companies to serve food and beverages to the employees of the companies in the cafeteria designated within the companies' premises. In this model, the food is directly served by the Applicant to the employees of the companies. In such type of the contracts, the amount of consideration is paid by the companies directly to the Applicant as per the agreed sched
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y obligation to provide canteen services to its employees. Under such circumstances, the companies/institutions outsource the activity of running the canteen to the third-party service providers, like the Applicant.
2.9 Presently, the Applicant treats the catering services provided by it under B2C Model as canteen/restaurant services under Entry. No. 7 (i) of Notification No. 11/2017 dated 28th June 2017 as amended by the Notification No. 46/2017- Central Tax (Rate) dated 14th November 2017 and discharges GST at 5% cumulatively (CGST & SGST). For the catering services provided by it under B2B Model, the Applicant treats it as outdoor catering services under Entry 7 (v) of the abovementioned Notification and discharges GST at 18% cumulatively (CGST & SGST). However, given the absence of clarity in the area of catering services, the Applicant would like to seek an advance ruling whether the catering services provided by it under both the Models would amount to supply of canteen/restaura
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rvice Tax regime, the Revenue has accepted the Applicant's contention that it's business is covered under the definition of 'canteen service' and is not a 'outdoor catering' service.
A.1 The Applicant submits that the revenue authorities have already accepted the contention of the Applicant that the services provided by the Applicant squarely fall under the definition of “canteen service”. In this regard, the Applicant refers to the dispute raised by the department under the Service tax regime.
A.2 Under the Service Tax regime, the Applicant was, inter-alia, engaged in providing services in relation to serving of food or beverages to the employees of Lear Automotive India Pvt. Ltd., in the canteens maintained within the factory premises of Lear Automotive at Bhosari and Chakan. Both the factories of Lear Automotive (Bhosari and Chakan) are covered and are operating in accordance with the statutory requirements contained under the Factories Act, 1948. The
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) a license to serve alcoholic beverages.”
A.4 It is further submitted that the legislature never intended to grant benefit of exemption to air-conditioned restaurants, but because of this entry, the exemption was being availed by such restaurants.
A.5 To give effect to the legislative intent, an amendment was made to Entry No. 19 vide Notification No. 3/2013-ST dated 01.03.2013. The amended Entry No. 19 reads as follow:
“19. Services provided in relation to serving of food or beverages by a restaurant, eating joint or a mess, other than those having the facility of air-conditioning or central air-heating in any part of the establishment, at any time during the year.”
A.6 After the said amendment was carried out in Entry No. 19 of the said Notification, the wrongful availment of service tax exemption was stopped, but due to this, the canteens in the factories established as per the Factory Act,1948 and having air-conditioning/central air-heating facility was unable to avail benefi
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. 6,63,926/- for claiming the refund of service tax paid by it on the services in relation to serving of foods and beverages provided at the canteen maintained in the factory of Lear Automotive in Form-R under Section 11B of the Central Excise Act, 1944.
A.9 However, the refund claim of the Applicant was rejected by the Ld. Assistant Commissioner (Refund), Service Tax, Pune Commissionerate vide his Order-in-Original No. R/693/2015-2016 dated 21.03.2015 on the ground that the Applicant is not eligible for exemption under the aforesaid notifications since they are not available for 'outdoor catering services'.
A.10 The Applicant then filed an appeal against the above-referred OIO dated 21.03.2015 on various grounds. The appeal was decided by the Ld. Commissioner, Service Tax, (Appeals), Pune vide his Order-in-Appeal No. PUN-SVTAX-000-APP-195-16-17 dated 23.08.2016 (Attached herewith as Annexure-1). The issue involved in the appeal was whether canteen services provided by
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f whether, the exemption could be provided to the Applicant under Entry No. 19A of Notification No. 25/2012-ST (as amended by Notification No. 14/2003-ST), it was held that the Applicant fulfilled both the conditions as stated under:
a) Of serving food at a canteen which is maintained in a factory covered under Factory Act, 1948
b) The canteen has an air-conditioned facility.
A.12 In light of the above, the Ld. Commissioner (Appeals) held that the Applicant's canteen facility at the Chakan unit was eligible for exemption under the Entry No. 19A of Notification No. 25/2012-ST (as amended by Notification No. 14/2003-ST).
A.13 The Applicant respectfully submits before the advance ruling authority that in light of the above discussion it is clearly understood that the issue of whether the Applicant is providing canteen services has been settled in favor of the Applicant and stands settled under the previous regime. The OIA dated 23.08.2016 has categorically held that the services p
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under serial no. 7(i) of the Notification No. 11/2017 -Central Tax(Rate) dated 28.06.2017 (hereinafter referred to as the “rate notification”) (reproduced at para B.9) and therefore it should be given the same treatment.
A.17 The OIA dated 23.08.2016 has been accepted by the Department in so far as no appeal has been filed against the same by the Department. Therefore, it is clearly understood that the Department has accepted the contention of the Applicant that the services provided by the Applicant are in the nature of 'canteen' services only and the same cannot be classified as 'outdoor catering' services.
B. The nature of the services provided by the Applicant has remained the same under the GST regime and therefore the services provided by the Applicant will be considered as 'canteen' service even under the GST regime and the Department cannot contend to the contrary.
B.1 The Applicant submits that the nature of services provided by the Applicant has re
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e or in any other manner, whatsoever, of goods, being food or any other article for human consumption or any drink (other than alcoholic liquor for human consumption), where such supply or service is for cash deferred payment or other valuable consideration.”
B.4 Further, the rates for the supply of services were notified vide the rate notification. Serial No. 7 of the above-referred notification notified the rate for services provided by a canteen and outdoor caterer. The relevant paras of the said notification read as follows
Sl No.
Chapter, Section or Heading
Description of Service
Rate (per cent.)
Condition
7
Heading 9963 (Accommodation, food and beverage services)
(i) Supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or drink, where such supply or service is for cash, deferred payment or other valuable
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ink (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
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B.5 The above notification was amended by the Central Government vide its Notification No. 46/2017- Central Tax(Rate) dated 14.11.2017 wherein the item nos. (i) was substituted as following:
Sl No.
Chapter, Section or Heading
Description of Service
Rate (per cent.)
Condition
7
Heading 9963 (Accommodation, food and beverage services)
“(i) Supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or drink, where such supply or service is for cash, deferred payment or other valuable consideration, provided by a restaurant, eating joint including mess, canteen, whetherfor consumption
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ght to be taxed at 5% (2.5%+2.5%) provided the supplier has not availed any ITC in respect of the same. In this regard, attention is also invited to entry at Serial No. 7(v) of the rate notification which specifies that the services provided in the nature of 'outdoor catering' services are taxable at the rate of 18% (9%+9%).
B.7 Thus, it is imperative at this juncture to identify as to whether the services provided by the Applicant fall under the category of services covered by Serial No. 7(i) or Serial No. 7(v) of the rate notification and the taxability of the said service will be determined accordingly.
B.8 In this regard, the terms 'Restaurant', 'Canteen', 'Outdoor catering', 'Caterer” are not defined under GST law. For better understanding and clarity, we will refer to the dictionary meaning of these terms and other interpretative aids. In this regard, reference is made to the following definition of canteen as given under various dictionaries
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squarely falls under the definition of canteen services. The Applicant submits that in most of the cases it is involved in cooking the food and beverages at the factory premises and the same is supplied to the employees of the clients for a consideration. whereas in some cases, the Applicant prepares the food elsewhere at a central kitchen facility and further the same to the client's premises for further supply to the employees of the factory.
B.10 Therefore, the Applicant squarely falls under the Serial No. 7(i) of the rate notification and is eligible to collect tax at the rate of 2.5% subject to the conditions mentioned therein.
B.11 The contention of the Applicant is further clarified by the plain reading of the Circular No. 28/02/2018-GST dated 08.01.2018 read with corrigendum issued vide Circular No. 28/02/2018 dated 18.01.2018. The aforesaid circular while clarifying the taxability of mess facility provided in educational institutions stated that the supply of food or be
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ged on goods and services used in supplying the service has not been taken, effective from 15.11.2017.”
B.12 The above corrigendum supports the contention of the Applicant that if food or drinks are supplied in a mess or canteen by anyone other than the institution, college or the company itself then the same is taxable at the rate of 5% provided no ITC has been taken on the goods and services used in supplying the said service. It is pertinent to note here that the above-referred circulars have used the example of education institutions only for clarificatory purposes and it is not the case here that the circular is restricted to only the mess or canteens operating in education institutions. Entry 7(i) of the rate notification includes all kinds of mess, canteens, restaurant and eating joints and is not restricted to the ones operational at the educational institutions.
B. 13 In this regard, the Applicant places reliance upon the sample agreements entered into with its clients namel
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y explained in the preceding paras that it is engaged in providing services which squarely fall under canteen services and the same are liable to be taxed accordingly. Further, in this regard the Applicant submits that the nature of services provided by the Applicant has not changed under the previous regime as well as the existing regime. The Applicant having satisfied that it provides canteen services should squarely fall under Entry 7(i) of the rate notification.
B. 15 In this regard, the Applicant submits that under the earlier law the Applicant was denied the exemption since the term 'canteen' was not mentioned under the relevant entry, however, the Entry No. 7(i) of the rate notification includes the term 'canteen' also and the therefore the same has to be construed accordingly. Further, the Department has also accepted the contention of the Applicant that it is engaged in providing canteen services and not outdoor catering services.
B. 16 Therefore, in light of
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39; service.
B. 18 Assuming, that the services provided by the Applicant contains elements of both 'outdoor catering' and 'canteen' services, the Applicant should be given the benefit of adopting the lower rate of tax. The Applicant submits that it is an established rule of law that when a particular service is capable of falling under two Categories, the assessee can adopt the classification beneficial to it.
B. 19 In this regard, the Applicant places reliance upon the decision of the Hon'ble Supreme Court in the case of Minwool Rock Fibers Ltd. [2012 (278) ELT 581 (SC)] wherein it has been clearly held that in a classification dispute if a particular good is capable of falling under two competitive headings then the heading beneficial to the assessee should be adopted. The relevant portion of the said decision reads as under:
“13. We have already noticed the relevant entries to which we are concerned with in this appeal. No doubt there is a specific entry which
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also specific heading like a heading based on commercial nomenclature. Therefore, we are of the view that the goods in issue are appropriately classifiable under Subheading No. 6807.10 of the tariff entry.”
B.20 Applying the ratio of the above case to the facts of the present matter, it is clearly understood that in case the Applicant's services fall under both the categories of 'outdoor catering' as well as 'canteen' then the same should be classified under the category of 'canteen' services as the same is beneficial for the Applicant. Accordingly, the present services are liable to be taxed at the rate of 5% as per the Serial No. 7(i) of the rate notification.
B 21 In this regard, reliance is also placed upon the case of Share Medical Care vs Union of India [2007 (209) E.L.T. 321 (S.C.)], wherein the Hon'ble Supreme Court held in clear terms that in a case where the applicant is entitled to benefit under two different Notifications or under two diffe
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n claiming exemption under category 3 of the notification is illegal and improper. The prayer ought to have been considered and decided on merits. Grant of exemption under category 2 of the notification or withdrawal of the said benefit cannot come in the umy of the applicant in claiming exemption under category 3 if the conditions laid down thereunder have been fulfilled. The High Court also committed the same error and hence the order of the High Court also suffers from the same infirmity and is liable to be set aside.”
…Underlining Supplied
B. 22 Similarly, the Applicant submits that since the tax rate of 5% is a benefit given to the services falling under the Serial No. 7(i) of the rate notification, the same should be extended to the services provided by the Applicant also by adopting the principle of beneficial interpretation.
C. The Advance ruling passed in the case of Rashmi Hospitality Services Pvt. Ltd, is not applicable in the present case
C.1 At this juncture it is pe
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ority finally held that the supply of services by Rashmi Hospitality Services Pvt. Ltd. is covered by Sr. No. 7(v) of the Notification No. 11/2017- Central Tax (Rate) as outdoor catering, attracting GST @18%. In this regard the Ld. Advance ruling authorities had relied upon the decision of the Hon'ble Allahabad High Court in the case of Indian Coffee Worker's Co-op Society Ltd. reported at [2014 (34) STR 546 (All.)].
C.3 The Hon'ble Allahabad High Court in the above-mentioned case had held that activities of providing food, beverages (alcoholic or non-alcoholic) or crockery and similar articles for any purpose or occasion which are provided at a place other than his own provided to him by way of tenancy or provided by the recipient will – fall under the category of 'outdoor catering services' as defined under the Section (65) (76a) read with Section 65(24) of the Finance Act, 1994.
C. 4 The Applicant submits that the above-referred Advance Ruling passed by the Guj
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ase of Indian Coffee Workers (supra) which is not applicable to the facts of the present case. The Hon'ble Allahabad High Court in the aforementioned case had held that it is immaterial as to who is the recipient of the service while determining whether a particular service is outdoor catering service or not. The Applicant submits that in light of the corrigendum issued vide the Circular No. 28/02/2018 dated 18.01.2018 (reproduced at para B.11) it is clearly established that the determination of a supplier and recipient of service is an important factor while deciding whether the service provided falls under the category of mess or canteen, under the GST law.
C.8 Thus, the decision of the Allahabad High Court passed in the context of Service Tax law cannot be relied upon in light of the conflicting principles. In light of the same, the aforesaid ruling cannot be relied upon in the present case since the same follows the principle laid down in the Indian Coffee Workers decision whi
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s upon the Applicant since the consideration is paid by the employees and the same is not covered by the client company. However, the Allahabad High Court decision in the above case has not considered the possibility of the present services falling under the category of 'restaurant' service and hence the said decision is not applicable in the present case.
C.11 Thirdly, the Applicant submits that the above ruling is not applicable in the present case insofar as it has failed to examine or decide the applicability of the Circular No. 28/02/2018 dated 18.01.2018 in the facts of the case. It is humbly submitted that the Circular No. 28/02/2018 dated 18.01.2018 is important to consider in the facts involved in the present case and the aforesaid ruling having failed to consider the same suffers from judicial infirmity and the same cannot be relied upon the decide the present case.
D. Without prejudice to the above, the Applicant submits that the B2C services provided by it are squ
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eople pay to sit and eat meals that are cooked and served on the premises.' The meaning of the term 'Canteen' is given in the above referred Dictionary as 'a restaurant in a workplace or educational establishment.'
D.4 According to the above referred dictionary meaning, the term Restaurant means the place where people pay for dining out in the premises where the food is cooked and served. Furthermore, the term canteen means a restaurant (i.e. a place where people sit and eat meal) which is attached to a factory, school etc.
D.5 Similar to the services provided in a restaurant, the Applicant has pre-fixed menu which cannot be altered by the consumer i.e. the employee. Further, the food and beverages are supplied at the place and time which are not decided by the consumer just like any restaurant.
D.6 Thus, the Applicant submits that the services provided by it are akin to a restaurant service and the same should be taxed accordingly. In light of the above, the App
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he aforesaid agreement).
D.8 In this regard, the Applicant wishes to further make a reference to the above agreement wherein the predecided menu is attached as Annexure-D to the agreement dated 23.03.2018. It is clear from the perusal of the same that the employees are provided restaurant services as they cannot alter the menu or personalise it to their own choice.
D.9 In the present case, the recipient of the services (i.e. the employees) would have a limited choice of menu to select the meal from. Also, apart from the standard level of servicing, the employees would not be in position to demand for customization, personalization of the services from the Applicant. Therefore, it can be concluded that Applicant is providing the restaurant services to its employees under B2C model and the same is not covered by outdoor catering services.
QUESTIONS REQUIRING ADVANCE RULING
The question on which Advance Ruling is sought by the Applicant is as under:
The recent amendment made in the N
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in the Concise Oxford English Dictionary as a place where people pay to sit and eat meals that are cooked and served on the premises.' The meaning of the term 'Canteen' is given in the above referred Dictionary as a restaurant in a workplace or educational establishment.'
C.2 Some of the Dictionary meanings of the word 'canteen' are as under:
* A restaurant provided by an organization such as college, factory, or a company for its students or staff (ref: www.oxforddictionaries.com')
* A restaurant attached to a factory, school, etc. providing meals for large number of people (ref: www.colinsdictionary.com')
* A place in a factory, office,etc. where food and meals are sold, often at a lower than usual price (ref: www.dictionary.cambridge.org)
C.3 Therefore, the canteen is understood to be a place, generally in an organization or institute such as factory, school, etc. where meals are provided. Therefore, to constitute a canteen it is important tha
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selves or is outsourced to a third person. Supply of food or drink provided mess or canteen is taxable at 5% without Input Tax Credit Serial No. 7(i) of notification No. 13/207 7-CT (Rate) as amended vide notification No. 46/2017CT (Rate) dated 14.11.2017 refers). It is immaterial whether the service is provided by the educational institution itself or the institution outsources the activity to an outside contractor.”
…………….Emphasis Supplied.
C.6 The abovementioned Circular provides that the supply of food or drink provided by a mess or canteen to the students and staffs are to be classified under 5% category of catering services irrespective of such services being provided by the educational institution itself or is outsourced to an outside contractor.
Also, to further clarify, a Corrigendum to the above circular was issued on 18.01.2018. The relevant extract of the Corrigendum to the Circular is given below:
” In Para 2 of the said circular, for
“It is immaterial wheth
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is Supplied.
C.7 Therefore, from the above Circular, it is amply clear that the catering services provided by anyone other than the educational institutions (i.e. an outdoor caterer) to the students, staff, etc. of the education institution, is to be treated as canteen' services as covered under Entry No. 7(i) of Notification No.11/2017 – CT (Rate) and would attract 5% GST cumulatively (CGST & SGST).
C.8 In view of the above submissions, the Applicant has analysed the catering services provided by it under both the Models, as follows:
B2C Model
C.9 The Applicant submits that the catering services by it under B2C Model involves supply of food or drinks to the employees in the canteen established in the premises of the companies/institutions. Under this Model, the Applicant recovers the charges for supply of food or drinks from the staff/employees.
C.10 On reading and applying the meaning of the term “canteen' and also the Circular to the Applicant's B2C Model, the Appli
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ons, the nature of services remains to be canteen services and not otherwise.
D ISSUES RELATING TO ADVANCE RULING AND APPLICANT'S UNDERSTANDING.
Question
D. 1 Whether the catering services provided by the Applicant under B2B and B2C Models are to be classified as canteen services?
Applicant's Understanding
D.2 Based on the above discussions and keeping in mind the dictionary meaning of the term 'canteen' and the Circular No. 28/02/2018-GST dated 08th January 2018, the Applicant is convinced that the supply of catering services provided by it to the employees of the companies/ institutions under both the Models are to be classified under Entry.No. 7 (i) attracting 5% GST (both CGST & SGST), irrespective of whether the consideration is received from the employees or from the companies.
03. CONTENTION – AS PER THE CONCERNED OFFICER
The submission, as reproduced verbatim, could be seen thus-
1. Question on which Advance Ruling is required –
Whether the catering ser
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ed with the companies premises In this model ,the food is directly served by the Applicant to the employees of the companies. The amount of consideration is paid by the companies directly to the Applicant as per the agreed schedule.
Under both the Models, the food is prepared either in the kitchen located in the companies' premises or in the 'centralized kitchen located outside the companies' premises.
Presently, the Applicant treats the catering services provided by it under B2C Model as canteen/restaurant services under Entry No.7(i) of the Notification No.11/2017 dated 28 th June 2017 as amended by the Notification 17- Central Tax (Rate) dated 14 th November 2017 and discharges GST at 5% cumulatively (CGST & SGST) For the catering services provided by it under B2B Model, the Applicant treats it as outdoor catering services under Entry No. 7(v) of the above mentioned Notification and discharges GST at 18 % cumulatively (CGST & SGST). The Applicant would like to seek an
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v) of the said Notification. The Entry No.7(v) of the above mentioned Notification is as follows. “Supply, by way of or as part of any service or in any other manner whatsoever in outdoor catering wherein goods, being food or another 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.”
As the Applicant is providing Outdoor Catering services, the amended Notification No.46/2017- Central Tax (Rate) dated 14 th November 2017 is not applicable to the Applicant. The Applicant is liable to pay GST at 18% cumulatively (CGST & SGST) on outdoor catering services provided by him as per Entry No.7(v) of the above mentioned Notification No.11/2017 dated 28th June 2017.
Under Service Tax Regime, The expression “caterer' is defined in clause (24) of Section 65 of the Finance Act 1994 as follows:
“Caterer' means any per
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05) (zzt) read with clauses (24) and (76a) of the Finance Act, 1994.
04. HEARING
4.1 The case was taken up for preliminary hearing on dt. 16.05.2018, with respect to admission or rejection of the application nobody was present from the side of applicant. The jurisdictional officer, Sh. Y. A. Lokre, Dy. Commr. of S.T.(PUN-VAT-E-603), Pune appeared and made written submissions.
4.2 The application was admitted and final hearing was held on 26.06.2018 , Sh. Sandeep Sachdeva, Advocate along with Sh. Nirav Karia, Advocate appeared and made oral and written submissions as per their ARA. Sh. Sandeep Sachdeva, Advocate requested for grant of further two weeks time for making some more written submissions which is considered and they were requested to make submissions as desired latest by 09.07.20187 without fail. The jurisdictional officer, Sh. A. Lokre, Dy. Commr. of S.T.(PUN-VAT-E-603), Pune appeared and stated that they have already made written submissions.
05. OBSERVATIONS
5.1 We hav
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a centralized kitchen located outside the company's premises, (b) companies may provide utensils, electricity, equipment, furniture, pest control services etc. depending on the contract, (c) they have to maintain cleanliness in the canteen and in most of cases, a Canteen Committee set up by the Company will inspect the quality standards of materials, food items to be supplied in the canteen and (d) the food rates are as per the contract between the company and the applicant.
5.5 We find that at present they are treating catering services provided under B2C Model as canteen/ restaurant services under Entry. No. 7 (i) of Notification No. 11/2017 dated 28th June 2017 as amended and are paying GST at 5% cumulatively (CGST & SGST). Under B2B Model, they are treating such catering services as outdoor catering services under Entry 7 (v) of the abovementioned Notification and are paying GST at 18% cumulatively (CGST & SGST).
5.6 We find that there is no doubt in the applicant's mind
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tsoever, of goods, being food or any other article for human consumption or drink, where such supply or service is for cash, deferred payment or other valuable consideration, provided by a restaurant, eating joint including mess, canteen, neither having the facility of air-conditioning or central air-heating in any part of the establishment, at any time during the year and nor having licence or permit or by whatever name called to serve alcoholic liquor for human consumption.
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(ii) Accommodation in hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes ……………………
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(iii) Supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink, where such supply or service is for cash, deferred payment or other valuable consideration, provided by a restaurant, eating joint including mess, ca
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ation in hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes having declared tariff ……….
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(vii) Supply, by way of or as part of any service or in any other manner whatsoever, of goods, including but not limited to food or any other article for human consumption or any drink (whether or not alcoholic liquor for human consumption), where such supply or service is for cash, deferred payment or other valuable consideration, in a premises (including hotel, convention center, club, pandal, shamiana or any other place, specially arranged for organising a function) together with renting of such premises.
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(viii) Accommodation in hotels including five star hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes having declared tariff …………..
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(ix) Accommodation, food and beverage services other tha
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ocated 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.
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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)].
5.8 We find, from the submissions made by the applicant, that the provisions of clause (ii), (iii), (vi), and (vii) of the above mentioned Notification do not apply to the current facts in hand. Therefore the issue before us is to ascertain whether the activities of the applica
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mention post the amendment. Hence it can be inferred that the said clause post the amendment made considers outdoor catering as a 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.
5.11 Since the supply of catering services provided by the applicant cannot be considered to be in the nature of “outdoor catering”, we shall now discuss whether the activities of the applicant would fall under Sr. No. 7, Headings 9963(i) of the above referred Notification. To understand whether the activity of the applicant as claimed is 'canteen services' we would be required to examine as to what a canteen is.
5.12 We find that word “canteen” as per Cambridge English Dictionary is “a place in factory, office, etc. where food and meals are sold often at a lower than usual price”.
“A pl
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urnable basis in good and proper condition. Also, generally water and electricity is also provided by the company on chargeable or maybe non chargeable basis.
(3) Some or all of the food, snacks or tea and coffee may be cooked or prepared in the canteen itself.
(4) The items are sold to the employees directly by the contractor at agreed prices which are mostly subsidized and the sale amounts are collected by the contractor themselves. However prepaid meal vouchers may also be given to employees by the company which are to be accepted by the contractor.
(5) The contractor may be required to serve to employees by counter service or even table service in respect of senior officials of the company.
(6) The company communicates to the contractor only approximate estimated quantity consumption it does not guarantee any quantity which may vary on a daily basis.
(7) The contractor can generally sell additional items with the approval of canteen management, company management and rates of
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TOR' that the Contractor shall ensure that the food is cooked and carried from outside and no food item is prepared in the company premises using gas/electricity or otherwise. RMSL has under the contract assured the applicant of a minimum of 370 lunch meals. RMSL shall provide space, fixtures, fittings equipment, etc.
5.15 In their contract with CTI, it is again clearly seen from a reading EXHIBIT A to the agreement/contract that the location of the Kitchen of the applicant is at a distance of about 7 kms from the CTI plant and therefore it appears that the food is cooked and carried from outside and sold in CTI's premises. Here too it is seen that the applicant has been provided with space, utensils and other equipments, crockery, cutlery, water, electricity, cleaning of cafeteria, etc. Menu is also dictated by CTI in general.
5.16 In their contract with TCS, from a reading of para 13 of Annexure A to the contract/agreement it is seen that the food is cooked at some main kit
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oning or central air-heating in any part of the establishment, at any time during the year, as the applicant has not clarified the same anywhere. The said clause (i) has been amended by Notification No. 16/2017 as “”(i) Supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or drink, where such supply or service is for cash, deferred payment or other valuable 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, club, 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
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held hereinabove, we pass an order as follows :
ORDER
(under section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017)
NO.GST-ARA- 05/2018-19/B-61 Mumbai, dt. 09.07.2018
For reasons as discussed in the body of the order, the questions are answered thus –
Question :- Whether the catering services provided by the Applicant under B2B Model and B2C Model are to be classified as canteen/restaurant services under Entry. No. 7(i) of the Notification No. 11/2017 dated 28th June 2017 as amended by the Notification No. 46/2017- Central Tax (Rate) dated 14th November 2017 or as outdoor catering services under Entry. No 7(v) of the said Notification?
Answer : In view of the observations and discussions made above the activity undertaken by the appl
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