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2018 (12) TMI 1088 - AAR - GSTLevy of GST - Canteen services - services of serving food - input tax credit - N/N. 13/2018-Central Tax(Rate) dt.26.7.18 - principle supply - rate of GST - composite supply with transport service Held that:- The activity of supply of food in canteens of office, factory, hospital, college, industrial unit etc. on contractual basis excepting that supply is not event based or on specific occasions, constitute supply of service in terms of amended Notification No.13/2018-Central Tax(Rate) dt.26.7.18 and is taxable at rate of 2.5% CGST + 2.5% SGST and the supplier is not eligible for the input tax credit as per the condition stipulated therein. Earlier, CBEC has clarified the queries seeking clarification regarding the taxability and rate of GST on services by a college hostel mess. As per the Circular No. 28/02/2018-GST dated 08-01-2018 issued in this regard, normally the educational institutions have mess facility for providing food to their students and staff. Such facility is either run by the institution/ students themselves or is outsourced to a third person. Further it has been clarified that the supply of food or drink provided by a mess or canteen is taxable at 5% without Input Tax Credit [Serial No. 7(i) of notification No. 11/2017-CT (Rate) as amended vide notification No. 46/2017-CT (Rate) dated 14.11.2017 refers]. Levy of GST - Transport services to a training institute for carting food from one building to another for service/sale - Held that:- The applicant in addition to the supply of food, is also undertaking transportation of food from the place of preparation of food to the premises where it is served. Here the applicant is undertaking two supplies, one is supply of food and another is transportation service. Two supplies are involved and it is a composite supply where the supply of food is a Principal Supply and providing transportation is ancillary supply. In the instant case, principal supply being supply of food i.e. outdoor catering service, and transportation is ancillary, the whole transaction attracts 18% GST being highest rate of tax compared to tax on transportation service. Therefore, the applicant needs to discharge GST on the gross amount (cost of Food + cost of Transportation ) at the rate of 18% i.e., GST rate of outdoor catering service. Ruling:- The activity of supply of food in canteens of office, factory, hospital, college, industrial unit etc. on contractual basis excepting that supply is not event based or on specific occasions, constitute supply of service in terms of amended Notification No.13/2018-Central Tax(Rate) dt.26.7.18 and is taxable at the rate of 2.5% CGST + 2.5% SGST and the supplier is not eligible for the input tax credit as per the condition stipulated therein. Where the applicant provides transport services to a training institute for carting food from one building to another for service/sale and the applicant charges a separate transport charges, the applicant needs to discharge GST on the gross amount (cost of Food + cost of Transportation) at the rate of 18% GST.
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