In re Goodwill Industrial Canteen (GST AAR Tamilnadu)
Clarification regarding applicable GST to the outdoor catering services rendered by them to their clients.
The services of the applicant of supplying food and beverages on the premises of industrial unit/office, which are on the terms of the contract with M/s Kone Elevators and such other contracts, are liable to tax at the rate of 9% CGST under SI.No. 7(v) of Notification No. 11/2017 -C.T. (Rate) dated 28.06.2017 and 9% SGST under SI.No. 7(v) of G.O.(Ms) No 72 dated 29.06.2017 No.ll(2)/CTR/532(d-14)/2017 for the period upto 26.07.2018 and from 27.07.2018 onwards at the rate of 2.5% CGST under SI.No. 7(i) of the Notification No. 11/2017-C.T. (Rate) as amended and at the rate of 2.5% SGST under SI.No. 7(i) of G.O.(Ms) No 72 dated 29.06.2017 No.ll(2)/CTR/532(d-14)/2017 as amended subject to the condition that credit of input tax charged on goods and services used in supplying the services are has not been taken read with Explanation (iv) of said Notifications.
FULL TEXT OF ADVANCE RULING
Note : Any appeal against the advance ruling order shall be filed before the Tamil Nadu State Appellate Authority for Advance Ruling, Chennai under Sub-section (1) of Section 100 of CGST ACT/TNGST Act 2017 within 30 days from the date on which the ruling sought to be appealed against is communicated.
At the outset, we would like to make it clear that the provisions of both the Central Goods and Service Tax Act and the Tamil Nadu Goods and Service Tax Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the Central Goods and Service Tax Act would also mean a reference to the same provisions under the Tamil Nadu Goods and Service Tax Act.
M/s Goodwill Industrial Canteen, 240 KCT ITI Complex, Thodugadu Village, Tiruvallur (hereinafter called the Applicant or Goodwill) is registered under GST vide registration No. 33AHPPB9234K1Z5. The applicant has submitted the copy of application in Form GST ARA -01 and also submitted a copy of Challan evidencing payment of application fees of Rs.5,000/-each under sub-rule (1) of Rule 104 of CGST rules 2017 and TNSGST Rules 2017. They are Industrial caterers. The applicant has sought advance ruling to know the applicable percentage of GST to their business.
2. The Applicant has stated to render catering services to various companies. They prepare food in their place and supply to the employees of their clients/companies. The said companies provide them the rent free space to distribute the food to the employees of the companies. They purchase materials and use their own manpower in cooking and distributing food. The applicant has submitted that, on interpretation of Notification 11/2017CT(R)dated 28/06/2017 as amended, they assume that GST for the catering services rendered by them is 5%.
3. The Authorised Representative of the Applicant was personally heard in the matter on 08.05.2018. In the first hearing, the Applicant submitted, that they enter into contracts with companies on whose rent free premises where food is supplied, no payment is taken from employees of the company. They submitted that it is a catering service and eligible for SI.No. 7(i) of Notification No. 11/17 as amended. In the subsequent hearing, the applicant submitted a copy of Contract which is indicative of all their contracts and stated that they are submitting a copy of Advance Ruling of Gujarat on similar issue which has held that SI.No. 7(v) of Notification No. 11/17 is applicable and that in their case too SI.No. 7(v) applies at 18%, that they are already raising invoices at 18%, they only supply to Industries/commercial entities and not to educational institutions.
4. The Applicant has furnished their agreement with M/s Kone Elevators (hereinafter referred as client), Chennai to run the Industrial Canteen at the Factory. As per the contract entered by the Applicant with the client, the premises for services to be provided for canteen has been made available to the Applicant by the client along with required furniture, fittings, cooking and catering utensils, and crockery and cutlery items apart from providing water, electricity and fuel. The Applicant has to purchase the required provisions, vegetables, etc. prepare food stuff as per the menu given by the Management using the Applicant’s manpower. This will be served to the employees, by collecting coupons on behalf of the client. Based on the coupons collected, the Applicant will give a bill and payment will be made by the company to the Applicant on monthly basis.
5. The Advance Ruling is sought on the applicability of Notification No. 46/2017-C.T. (Rate) dated 14th November 2017 to the case at hand. In the case at hand, the Applicant is engaged in supplying food and beverages at the canteen of their customers. From the contracts furnished, it is seen that the Applicant supplies the food in the place of business of the Service Recipient. The charges are received from the companies monthly basis on the coupons collected. In short, it is deciphered that the Applicant is vested with management of the canteen facilities. The Applicant himself does not get paid for by the consumers of the food and beverages. The Recipient of the services are the companies who enter into contract with the applicant. Supply of food is classified under 9963. The issue to be decided is whether the supply of the applicant falls under 7(i) of Notification No. 11/2017 dated 28.06.2017 or under 7(v) of the said Notification. The relevant extracts and the changes these entries underwent are detailed below:
5.1 Notification 11/2017-C.T. (Rate) dated 28th June 2017 provides the rate of various services under GST. The relevant rate extracts are as follows:
