In Re: M\/s. Goodwill Industrial Canteen
GST
2018 (9) TMI 1335 – AUTHORITY FOR ADVANCE RULING, TAMILNADU – 2018 (17) G. S. T. L. 171 (A. A. R. – GST)
AUTHORITY FOR ADVANCE RULING, TAMILNADU – AAR
Dated:- 30-8-2018
TN\/09\/AAR\/2018
GST
MS. MANASA GANGOTRI KATA AND S. VIJAYAKUMAR, MEMBER
\nNote. 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.
\nAt the outset, we would like to make it clear that the provisions of both the Central Goods and Service Tax Act and the Tamil Nadu Goods and Service Tax Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the Central Goods and Service Tax Act would also mean a reference to the same provisions under <\/p>\n
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Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n hat, 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%. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n th 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 with the applicant. Supply of food is classified under 9963. The issue to be decided is 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. The relevant extracts and the changes these entries underwent are detailed below: = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ce is for cash deferred payment or other valuable consideration. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n %. 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. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n r lodging purposes having declared tariff of any unit of accommodation of seven thousand five hundred rupees and above per unit per day or equivalent. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n o 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. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n teria 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. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n","protected":false},"excerpt":{"rendered":" In Re: M\/s. Goodwill Industrial CanteenGST2018 (9) TMI 1335 – AUTHORITY FOR ADVANCE RULING, TAMILNADU – 2018 (17) G. S. T. L. 171 (A. A. R. – GST)AUTHORITY FOR ADVANCE RULING, TAMILNADU – AARDated:- 30-8-2018TN\/09\/AAR\/2018 GSTMS. MANASA GANGOTRI KATA AND S. VIJAYAKUMAR, MEMBER Note. Any appeal against the advance ruling order shall be filed before … Continue reading “In Re: M\/s. Goodwill Industrial Canteen”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-13952","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/13952","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=13952"}],"version-history":[{"count":0,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/13952\/revisions"}],"wp:attachment":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=13952"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=13952"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=13952"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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\n3. 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 Contract which is indicative of all their contracts and stated that they are submitting a copy of Advance Ruling of Gujarat on similar issue which has held that Sl.No. 7(v) of Notification No. 11\/17 is applicable and that in their case too Sl.No. 7(v) applies at 18%, that they are already raising invoices at 18%, they only supply to Industries\/commercial entities and not to e<\/p>\n
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\n5.1 Notification 11\/2017-C.T. (Rate) dated 28th June 2017 provides t<\/p>\n
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\n9
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\nThe 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:
\n65.28. The Hon'ble Chairperson proposed a tax rate of 18% with input tax credit on the outdoor catering. The Hon'ble Chief Minister of Puducherry observed that a tax rate of 18% on outdoor catering was too high. The Hon'ble Chairperson observed that historically, this was the prevailing rate of tax on outdoor catering. The Hon'ble Deputy Chief Minister of Delhi stated that a tax rate of 18% on outdoor catering could lead to tax evasion. He cautioned th<\/p>\n
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\n65.29. Keeping in view the discussion as above, the Council agreed to apply tax rate of 5% tax without input tax credit on all standalone restaurants and a rate of tax of 18% with input tax credit on a restaurant in a hotel having room of declared tariff of more than Rs. 7,500 per night. The take-away food from a restaurant shall have similar tax treatment as that for the restaurant. Outdoor catering shall, however, attract tax at the r<\/p>\n
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\nExplanation.- “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.
\n2.5
\nProvided that credit of input tax charged on goods and services used in supplying the service has not been taken
\n[Please refer to Explanation no. (iv)].”;
\nAnd no amendment was made in Sl.No 7(v) of Notification No. 11\/2017 CT (Rate)
\n5.2 The above amendment is based on the decision of the GST Council, in its 23rd meeting held on 10th November 2017 which is given supra. From the discussions, it is evident that the intention of having tax rate of 5% as in Sl.no 7(i) is only in respect of supply of foods in Standalone restaurants and other similar eatin<\/p>\n
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\n5.3 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:
\n18. Rationalize entry relating to composite supply of food and drinks in restaurant, mess, canteen, eating joints and such supplies to institutions (educational, office, factory, hospital) on contractual basis at GST rate of 5%: and making it clear that the scope of outdoor catering under 7(v) is restricted to supplies in case of outdoor\/indoor functions that are event based and occasional in nature.
\nTo effect the above decision of the Council, the Notification<\/p>\n
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\n2.5
\nProvided 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)]
\nFrom 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.No 7(v) now only covers supply at functions which are occasional and event based. The supply of food to institutions which were earlier covered under entry at Sl.No. 7(v) has been included under Sl.No. 7(i) of the Notification No. 11\/2017-CT (Rate) with effect from 27th July 2018 and thereupon is liable to tax at the rate of 5% subject to t<\/p>\n
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