2018 (12) TMI 1088 – AUTHORITY FOR ADVANCE RULINGS, HYDERABAD TELANGANA – TMI – Levy of GST – Canteen services – services of serving food – input tax credit – N/N. 13/2018-Central Tax(Rate) dt.26.7.18 – principle supply – rate of GST – composite supply with transport service
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Held that:- The activity of supply of food in canteens of office, factory, hospital, college, industrial unit etc. on contractual basis excepting that supply is not event based or on specific occasions, constitute supply of service in terms of amended Notification No.13/2018-Central Tax(Rate) dt.26.7.18 and is taxable at rate of 2.5% CGST + 2.5% SGST and the supplier is not eligible for the input tax credit as per the condition stipulated therein.
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Earlier, CBEC has clarified the queries seeking clarification regarding the taxability and rate of GST on services by a college hostel mess. As per the Circular No. 28/02/2018-GST dated 08-01-2018 issued in this regard, normally the educational institutions h
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ply.
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In the instant case, principal supply being supply of food i.e. outdoor catering service, and transportation is ancillary, the whole transaction attracts 18% GST being highest rate of tax compared to tax on transportation service. Therefore, the applicant needs to discharge GST on the gross amount (cost of Food + cost of Transportation ) at the rate of 18% i.e., GST rate of outdoor catering service.
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Ruling:- The activity of supply of food in canteens of office, factory, hospital, college, industrial unit etc. on contractual basis excepting that supply is not event based or on specific occasions, constitute supply of service in terms of amended Notification No.13/2018-Central Tax(Rate) dt.26.7.18 and is taxable at the rate of 2.5% CGST + 2.5% SGST and the supplier is not eligible for the input tax credit as per the condition stipulated therein.
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Where the applicant provides transport services to a training institute for carting food from one building to another for
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g Services, maintenance of canteens in Industries, Educational establishments, providing food to student mess/s, training institutes and so on since the year 2005. 3. The applicant is registered under GST w.e.f., 1st July, 2017, previously they are registered with Service Tax as well as State VAT in the Governments of Telangana & Andhra Pradesh. 4. They made the following submissions: 1. The applicant provides canteen services in organizations like Infosys etc., wherein the food is cooked in the premises of Infosys and Sold to the employees of the said organization at a price mutually agreed upon, it is done on a regular daily basis. 2. The applicant provides its services of serving food – Breakfast + lunch & Dinner and any other food requirements from a Mess/Dining Hall to the trainees of the Training institution of banking such as SBIRD, Andhra Bank Staff College etc., Even here the food is prepared and sold/served to the trainees in the premises, where the trainees attend a
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all facilities. The Dining Hall/Cafeteria runs on a daily basis. A separate food license is Obtained by us for selling the food in this organization issued by GHMC. 6. Applicant entity also provides Transport services to a training institute for carting food from one building to another for service/sale. The applicant entity charges them a separate transport charges. They requested for an advance ruling as regards to the rate of GST to be levied on the activities mentioned at para 1,2,3,4 a, 4 b,5 and 6 of their above submissions. 5. They have submitted a brief statement of relevant facts as given below: 5.1 As stated above, the applicant entity was categorized/classified as outdoor caterers in the old regime of Service Tax/VAT, as the old regime of Service Tax did not have any other classifications/categories for the services rendered by us which is vast which includes operation of canteen/Mess/Eating House/mess operation/ food sales in Hospitals for patients and visitors/Campsite etc
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hearing and reiterated the following written submissions which are as under : i. The applicant provides canteen services in organizations like Infosys etc., wherein the food is cooked in the premises of Infosys and "Sold" to the employees of the said organization at a price mutually agreed upon, it is done on a regular daily basis. ii. The applicant provides its services of serving food – Breakfast + lunch & Dinner and any other food requirements from a Mess/Dining Hall to the trainees of the Training institution of banking such as SBIRD, Andhra Bank Staff College etc., Even here the food is prepared and sold/served to the trainees in the premises, where the trainees attend a residential programme and they are rooms for stay in the premises for the trainees iii. The applicant operates student mess for students in Engineering colleges(Higher Education) such as CVR college, and so on. The food is prepared and served in the hostel premises. iv. a). In the Educational Institu
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for service/sale. The applicant entity charges them a separate transport charges. Discussion & findings: 6. The issued raised at Sl No (1), (2), (3),(4)(a),(4)(b) & (5) in their application are covered under the Notification No.13/2018-Central Tax(Rate) dt.26.7.18. 7. The Notification No.13/2018-Central Tax(Rate) dt.26.7.18 issued amending the Notification Nos. 11/2017-CT(Rate) dt. 28-06-2017 Notification No. 46/2017-CT (Rate) dated 14.11.2017 covers the subject activities referred by the applicant in their application and the relevant portions of the said Notifications are reproduced as under: Serial No. 7(i) of notification No. 13/2018-CT (Rate) 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, of goods, being food or any other article for human consumption or any drink, provided by a restaurant, eating joint including mess, canteen, w
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ly of food in canteens of office, factory, hospital, college, industrial unit etc. on contractual basis excepting that supply is not event based or on specific occasions, constitute supply of service in terms of amended Notification No.13/2018-Central Tax(Rate) dt.26.7.18 and is taxable at rate of 2.5% CGST + 2.5% SGST and the supplier is not eligible for the input tax credit as per the condition stipulated therein. 9. Earlier, CBEC has clarified the queries seeking clarification regarding the taxability and rate of GST on services by a college hostel mess. As per the Circular No. 28/02/2018-GST dated 08-01-2018 issued in this regard, normally the educational institutions have mess facility for providing food to their students and staff. Such facility is either run by the institution/ students themselves or is outsourced to a third person. Further it has been clarified that the supply of food or drink provided by a mess or canteen is taxable at 5% without Input Tax Credit [Serial No. 7
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ly, shall be treated as a supply of such principal supply; and (b) a mixed supply comprising two or more supplies shall be treated as a supply of that particular supply which attracts the highest rate of tax. 12. In the instant case, principal supply being supply of food i.e. outdoor catering service, and transportation is ancillary, the whole transaction attracts 18% GST being highest rate of tax compared to tax on transportation service. Therefore, the applicant needs to discharge GST on the gross amount (cost of Food + cost of Transportation ) at the rate of 18% i.e., GST rate of outdoor catering service. 13. In view of the foregoing discussions, we pass the following order. Advance Ruling 1. For the points raised at s.no. 1, 2, 3, 4(a), 4(b) and 5 of their application i.e., the activity of supply of food in canteens of office, factory, hospital, college, industrial unit etc. on contractual basis excepting that supply is not event based or on specific occasions, constitute supply of
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