Outdoor Catering Service Taxable at 18% GST: AAR [Read Order]

The Gujarat Authority for Advance Ruling, recently held that the supply of service provided by the applicant is in nature of ‘ outdoor catering ’ and is liable to GST at the rate of 18%.

The Applicant, M/s. Rashmi Hospitality Services Private Limited, is an industrial canteen contractor who provides cantering services to manufacturing industries at various places of their customers who have in house canteens at their factories. The applicant normally charges Goods & Services Tax at the rate of 18% classifying their services under heading 9963 as outdoor catering. One of the customer of the applicant asked the applicant to charge GST at the rate of 12%. The applicant has sought a clarification regarding the rate of taxability, before the AAR.

The applicant submitted that as per the contract made between the applicant and client, the canteen space and all equipments have been provided by the client to the applicant and the applicant is only providing the services pertaining to Food, edible preparation service.

The Authority comprising of Members R.B. Mankodi & G.C. Jain found that the service recipient had engaged the applicant for running of the canteen for their workers/employees. The Members observed that the rates of the meal, snack, tea have been fixed and payable by the service recipient. They thus concluded that the applicant providing service from other than his own premises to the recipient and that the service provided was that of outdoor catering service.

The AAR relying on the decision of the Allahabad High Court in the case of Indian Coffee Workers’ Co-Op Society Ltd vs. CCE & ST. held that the supply of services by M/s. Rashmi Hospitality Services Private Limited is covered under Sr. 7(v) of Notification No.11/2017-Central Tax (Rate) dated 28.06.2017 as amended, issued under the Central Goods and Services Tax Act, 2017 and Notification No. 11/2017-State Tax (Rate) dated 30.06.2017, as amended, issued under the Gujarat Goods and Services Tax Act, 2017, attracting Goods and Service Tax at the rate 18%.