Outdoor Catering - A Judgement

[CA Akash Phophalia]

OUTDOOR CATERING I wish to share an important judgement in relation to outdoor catering - PERFECT VENDING (INDIA) PVT. LTD. Versus COMMR. OF SERVICE TAX, CHENNAI 2015 (3) TMI 1011 - CESTAT CHENNAI In this case the applicant is engaged in the business of manufacture and sale of coffee and tea vending machines as well as supply of tea and coffee in their customer’s premises. The applicant entered into an agreement with the client on the following terms and conditions :-

1. The applicant will supply coffee/tea of good quality as approved by the client on all working days as indicated by the authorized person from the client.

2. The timing of supply of tea/coffee will be indicated to the applicant and subsequently changes as per the requirement form time to time.

3. The applicant will be solely responsible for the maintenance/cleanliness and tidiness of the vending machine installed for the purpose of supplying of coffee/tea. It is also requested by the applicant to appoint a pantry boy in order to maintain the machines in good conditions. The gross monthly salary all inclusive of ₹ 5,830/- for a period of one year (which includes ESI/PF/Bonus, Gratuity, insurance etc.). The labour cost will be added along with the monthly bills.

4. The applicant will personally visit client’s premises regularly to ensure that the arrangements are working to the satisfaction of the representatives of the client.

5. Cash transactions by any of your employees with our employees are strictly forbidden and in any case the client will not be responsible for the same.On perusal of the said agreement, prima facie, it was found that the applicant is not simply selling tea/coffee to the client but also providing services in addition to that.

Thus this case clearly falls under the purview of outdoor catering service and is thus liable to be taxed under service tax net.Thus there are agreements in which place, material and even utensils are provided by the service receiver and the service provider brings some material and uses the said place, material etc and provides the service. These kinds of agreements will fall under the category of outdoor catering service and are liable to be taxed.This is just for your reference. It does not constitute our professional advice or recommendation.

CA Akash Phophalia 9799569294 ca.akashphophalia@gmail.com Office No 3, Second Floor Amrit Kalash, Residency Road Near Bombay Motor Circle Jodhpur - 342001 Rajasthan