5% GST applicable to Food, Soft Drinks and Snacks supplied in Snack Bar and Food Court: AAR [Read Order]

The Authority for Advance Ruling (AAR) has held that the food, soft drinks and snacks supplied in Snack bar and food court would be taxable at 5 percent under the Goods and Services Tax (GST) regime.

The applicant, an entity operating a mall and multiplex approached the Advance Ruling Authority seeking many clarifications including that whether 5% GST can be applied for items like food, soft drinks and snacks supplied in the snack bar and food court.

The authority found that the Notification No.11/2017-Central Tax (Rate) dated 28.06.2017 further amended by Notification No.46/2017-Central Tax (Rate) vide entry at Serial Number 7 and corresponding notifications issued under MPGST ACT,2017, squarely covers the services provided by the Applicant.

As per the Notification 5% tax applicable to such goods subject to the condition that no input tax charged on goods and services used in supplying the service has not been taken.

“As we gather from the submissions of the Applicant, they are not providing any accommodation facility for lodging and boarding and they are also not availing ITC of tax paid on goods & services used/utilized for providing services from the said Snack Bar,” it said.

“Further, on a different point of argument, we would also like to consider whether the impugned service would fall under the category of Outdoor Catering. The term ‘Outdoor Catering’ was defined under Section 65(76)(a) of the erstwhile Finance Act 1994 as “Outdoor caterer means a caterer engaged in providing service in connection with catering at place other than his own but including a place provided by way of tenancy or otherwise by the person receiving such service”. On considering the common parlance meaning of ‘Outdoor Catering’ and its above definition for Service Tax, we come to the conclusion that the supply of food, soft drinks and snacks sold in the Food Court or Snack Bar of the Applicant cannot by any stretch of imagination, be treated as a part of outdoor catering,” the authority said.