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TMI Blog2024 (10) TMI 192X X X X Extracts X X X X X X X X Extracts X X X X ..... t Bengal Authority for Advance Ruling Regulations, 2018. 1.1 At the outset, we would like to make it clear that the provisions of the Central Goods and Services Tax Act, 2017 (the CGST Act, for short) and the West Bengal Goods and Services Tax Act, 2017 (the WBGST Act, for short) have the same provisions in like matter except for certain provisions. Therefore, unless a mention is made specifically to such dissimilar provisions, a reference to the CGST Act would also mean reference to the corresponding similar provisions in the WBGST Act. Further to the earlier, henceforth for the purposes of these proceedings, the expression 'GST Act' would mean the CGST Act and the WBGST Act both. 1.2 The applicant submits that it is one of the premier and elite clubs of Kolkata and is primarily engaged in providing inter alia Club or Association Services, Short Term Accommodation, Restaurant, Catering services etc. The applicant has its own premises and is engaged in the business of providing "composite supply of catering service along with the renting of premises". The applicant wants to know whether the lower rate of GST @ 5% leviable on the Composite supply of "outdoor catering together with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion, Restaurant, Catering services etc. The applicant provides standalone service of renting of premise to the members for carrying out functions, wedding, social gatherings, parties etc. as well as indoor catering services along with the renting of premise. For rendering such services, the applicant needs to provide a bundle of services including renting of premises, decorations, light, sound and indoor catering. 2.2 The applicant has made this application seeking clarification whether the service provided by the him shall attract tax @ 5% vide entry No 7 (v) of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 or such service would attract tax @ 18% the vide entry No. 7(vi) of the said Notification. The relevant extract of the Notification is reproduced here under: Chapter, Section or Heading Sl. No. Description of Service Rate (per cent.) Condition Heading 9963 (Accommodation, food and beverage services) 7(v) Composite supply of 'outdoor catering' together with renting of premises (including hotel, convention center, club, pandal, shamiana or any other place, specially arranged for organising a function) at premises other than 'specified premises& ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ike furniture, air conditioner, refrigerators or any other amenities, but without excluding any discount offered on the published charges for such unit. 2.3 Further, the applicant refers to Schedule II of the GST Act, 2017 -'ACTIVITIES OR TRANSACTIONS TO BE TREATED AS SUPPLY OF GOODS OR SUPPLY OF SERVICES" The following composite supplies shall be treated as a supply of services, namely:- (b) supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (other than alcoholic liquor for human consumption), where such supply or service is for cash, deferred payment or other valuable consideration. Definition of "Composite Supply" Section 2 (30) - "composite supply" means a supply made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both, or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply; Illustration - Where goods are packed and transported with insurance, the supply of goods, packing materials, transport and insu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assified as Outdoor Catering Service. Reliance can be placed on the Advance Ruling pronounced by AAR West Bengal in the case of Manoj Mittal [2021 (48) GSTL 197 (AAR GST WB)], wherein it was held that - The term 'catering' has not been defined under the GST Act. In Cambridge Dictionary, 'catering' is defined as any job making or serving food. In Collins Dictionary, 'catering' has been defined as the activity or business of providing food for people. However, the term 'outdoor catering', according to Explanation given in Notification No. 20/2019-Central Tax (Rate) dated 30.09.2019 means supply, by way of or as part of any service, of goods, being food or any other article or human consumption or any drink, at Exhibition Halls, Events, Conferences, Marriage Halls and other outdoor or indoor functions that are event based and occasional in nature. Hence, the supply of services which are event based and occasional in nature must fall under the category "outdoor catering" services as per the definition. In view thereof, catering services along with the renting of premises within the club facility shall also qualify the definition of Outdoor Catering Ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvices rate notification removed any kind of ambiguity on issue and thus, restaurant cannot seek to pay GST at 18% (instead of 5% without ITC) and claim ITC. Further, the right to avail ITC is not an absolute right and conditions and restrictions may be prescribed for its availment. The applicability of GST on the Service of Outdoor Catering & Restaurant and the conditions/restrictions of ITC are same and hence the ruling issued for the 'Restaurant Service" will squarely be applicable for 'Outdoor Catering Services". In view of the aforesaid ruling, the applicants shall be mandatorily required to charge GST @ 5% without ITC when 'catering along with renting of premise' is being provided in a premises other than specified premise. However, if the applicant increases the Room Tariff to Rs. 7500 and above and satisfy the definition of specified premises, the applicant shall be liable to pay GST @ 18% with ITC on the service of 'Catering along with renting of premise". 2.10 The applicant submits that during the peak season, the applicant may consider increasing the Room Tariff to Rs. 7,500/- and above. In such cases, the applicant shall be construed to be a supplier located at 'Spec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supply would be considered as composite supply of 'outdoor catering' together with renting of premises so as to attract tax @ 5% vide entry no 7(v) of the Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017, as amended. The term 'outdoor catering', according to Explanation given in Notification No. 20/2019-Central Tax (Rate) dated 30.09.2019 means supply, by way of or as part of any service, of goods, being food or any other article for human consumption or any drink, at Exhibition Halls, Events, Conferences, Marriage Halls and other outdoor or indoor functions that are event based and occasional in nature. The applicant, vide this application, has sought advance ruling where food are supplied at event-based functions, which are occasional in nature. We are therefore of the view that the supply of food or any other article for human consumption or any drink, as provided by the applicant at any event-based function qualifies to be an 'outdoor catering'. 4.3 The applicant submits that in the normal course of business, the banquet services provided by him involves bundle of services such as renting of premises, decorations, light, sound and indoor catering etc. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd and transport by air is a bundle offered by a majority of airlines. 4.4 The applicant contends that he provides the banquet services together with catering services in the ordinary course of business and therefore such supply would attract tax @ 5%. To decide the issue, we would like to refer the 'Agenda for 37th GST Council Meeting-Volume-3' where in regard to proposal for 'Request to reduce GST rate on outdoor catering services to 5% without ITC' the Fitment Committee has recommended inter alia as follows: * The rate of taxation for composite supply of renting of a premise and catering therein may also be reduced to 5% without ITC from 18%. * Therefore, GST on outdoor catering services other than in premises having daily tariff of unit of accommodation of Rs. 7500 and above may be reduced to 5% without ITC. Catering in premises with daily tariff of unit of accommodation is Rs. 7500 and above shall remain at 18%. 4.5 We are therefore of the view that where the applicant provides renting of premises along with supply of food at any event, such supply would attract tax @ 5% with the restriction of input tax credit and subject to the condition that the Room Tariff of the clu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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