In Re: Merit Hospitality Services Pvt. Ltd.
GST
2018 (11) TMI 335 – APPELLATE AUTHORITY FOR ADVANCE RULING MAHARASHTRA – 2018 (18) G. S. T. L. 820 (App. A. A. R. – GST), [2019] 61 G S.T.R. 47 (AAR)
APPELLATE AUTHORITY FOR ADVANCE RULING MAHARASHTRA – AAAR
Dated:- 1-11-2018
MAH\/AAAR\/SS-RJ\/12\/2018-19
GST
SMT. SUNGITA SHARMA, AND SHRI RAJIV JALOTA, MEMBER
\nPROCEEDINGS
\n(under Section 101 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017)
\nAt the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provisions under the MGST Act.
\nThe present appeal has been filed under Section 100 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017 [herei<\/p>\n
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Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n The food is prepared at their own kitchen and it is distributed to various companies at different locations. There are four different situations mentioned below on the basis of which the company is carrying on the above mentioned business. These situations are based on the terms of the contract entered by Merit Hospitality with various corporate clients. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n food of Merit Hospitality is now with the “Employees Co-op society” and not with A Ltd. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n earned Advance Ruling Authority (ARA) erred in not answering the specific questions under the circumstances mentioned in case IV of the application namely: = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n th to a SEZ unit or a developer of SEZ are treated as 'zero' rated supplies. Further, Section 16(3) of the IGST Act allows a registered person to made a “zero rated supplies” without payment of Integrated tax subject to conditions, safeguards and procedure as laid out under rule 96A. As per Rule 96A(1), various requirements have been laid out for exports which under Rule 96A(3) mutatis mutandis apply to services given to SEZ units. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ecial Economic Zone is covered under the zero rated supply or otherwise. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n he appellant on 01.10.2018, wherein they have categorically submitted that they are registered as “Outdoor Caterers” and are basically engaged in providing the corporate catering services to their offices \/units as per the terms and conditions of the contracts entered with them. They further submitted that they prepare the food in their own kitchen and then distribute it to various companies at different locations. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n","protected":false},"excerpt":{"rendered":" In Re: Merit Hospitality Services Pvt. Ltd.GST2018 (11) TMI 335 – APPELLATE AUTHORITY FOR ADVANCE RULING MAHARASHTRA – 2018 (18) G. S. T. L. 820 (App. A. A. R. – GST), [2019] 61 G S.T.R. 47 (AAR)APPELLATE AUTHORITY FOR ADVANCE RULING MAHARASHTRA – AAARDated:- 1-11-2018MAH\/AAAR\/SS-RJ\/12\/2018-19 GSTSMT. SUNGITA SHARMA, AND SHRI RAJIV JALOTA, MEMBER PROCEEDINGS (under … Continue reading “In Re: Merit Hospitality Services Pvt. Ltd.”<\/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-14855","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/14855","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=14855"}],"version-history":[{"count":0,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/14855\/revisions"}],"wp:attachment":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=14855"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=14855"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=14855"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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\nCase (l) The Appellant has entered into a contract for supply of food to the employees of the company, say 'A' Ltd. The contract is signed between Merit Hospitality and 'A' Ltd. for supply of food. As per the terms of contract, Merit Hospitality has to supply the food at 'A' Ltd. 's premises. The distribution of the foods is directly done by the staff of 'A' Ltd. The menu and the material specifications are mentioned in the contract and also the rate of various items are pre-determined between Merit Hospitality and the company. The billing is done by the Merit Hospitality, directly to the company on the monthly basis and payment is re<\/p>\n
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\nQuestion: Under such circumstances, can it still be claimed that Merit Hospitality is running a canteen and the applicable rate of 5% be charged on our bills?
\nCase (IV) : The Merit Hospitality has entered into a contract with a company called say “B” Ltd. and B Ltd. is having its unit in SEZ area (Special Export Zone). The supply of food is done by Merit Hospitality to the employees of “B” Ltd. and the payment for the same is made by the employees of “B” Ltd. , directly to Merit Hospitality.
\nQuestion:
\n(a) Can Merit Hospitality claim that since the food is supplied directly to the SEZ area, hence no GST is applicable?'; or
\n(b) Can Merit Hospitality claim that it is running a canteen in SEZ area, hence no GST is applicable? Or
\n(c) Can Merit Hospitality claim that it is running a restaurant in SEZ area and hence applicable rate is 5% only?
\nB. The appellant filed an application for advance rulin<\/p>\n
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\nQ.(a) Merit Hospitality claim that since the food is supplied directly to the SEZ area, hence no GST is applicable?'; or
\nQ.(b) Can Merit Hospitality claim that it is running a canteen in SEZ area, hence no GST is applicable? Or
\nQ.(c) Can Merit Hospitality claim that it is running a restaurant in SEZ area and hence applicable rate is 5% only?
\n2. The Ld. Advance Ruling Authority erred in not deciding the issues of applicability of GST rate for supplies for supplies made to unit situated in Special Economic Zone (SEZ) as raised in the case IV of the application stating that all the facts required for decision in respect of the specific case were not put before the authority when factually all documents as listed and demanded by the Authority were promptly submitted by the Appellant during the course of proceeding as evidenced by va<\/p>\n
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\nThe Appellants craves leave to add, alter, delete any ground of appeal during the course of appeal.
\nPRAYER
\nIn view of the foregoing, the prayer made by the Appellant was as under:-
\na. To set aside the order on Case IV in the Original Advance Ruling Application;
\nb. Grant an opportunity for a personal hearing and make further submission of documents if any;
\nc. Pass any such further or other order as may be deemed fit and proper in the facts and circumstances of the case.
\nPersonal Hearing
\n6. Personal hearing in the matter was conducted on 03.10.2018, wh<\/p>\n
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\n8. First, we will discuss the “zero rated supply”, as provided under Section 16(1) of the IGST Act, 2017, which is reproduced herein below:
\nSection 16(1) “Zero rated supply” means any of the following supplies of goods or services or both, namely:-
\n(a) export of goods or services or both; or
\n(b) supply of goods or services or both to a Special Economic Zone developer or a Special Economic Zone unit.
\n9. Thus from the above provision, it is crystal clear that the supply made by the appellant to the employees of the unit located in SEZ cannot be construed as zero rated supply by any stretch of imagination, as the employees can neither be treated as SEZ developer nor as SEZ unit. Accordingly, GST will be applicable as per the classification of the services determined in terms of the scheme of the classification of services as provided under Annexure A to the Notification 11\/2017-C.T. (Rate) dated 28.06.2017 as am<\/p>\n
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\n11. From the foregoing, it is apparent that the food is being cooked at one place and being distributed to the various different locations of the companies with whom they have entered into contract. Thus, this event is not covered under the definition of the “Restaurant services” as discussed above. Thus, the appellant claim in the case IV that it is running Restaurant Services in the SEZ area is not tenable and hence the GST rate of 5% as envisaged by the appellant is not correct.
\nIn view of the above discussion and findings, we pass the following order :-
\nOrder
\nThe ser<\/p>\n
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