In re M/s Elior India Catering LLP (GST AAR Karnataka)
i. Whether, in the facts and circumstances of the case, the services rendered by the applicant under cash & carry model are in the nature of ‘services provided by canteen’ as per Sl. No. 7(i) or ‘outdoor catering services’ as per Sl. No. 7(v) of Notification No. 11/2017 – Central Tax (Rate) [as amended vide notification No. 46/2017-CT (Rate) dated 14.11.2017]?
The supply of goods being food or any other article for human consumption or any drink provided by the applicant under cash and carry model where in the items are prepared in the same premises from where it is supplied is covered under amended entry No. 7(i) of the Notification No. 11/2017 – Central Tax dated 28.06.2017 as amended by Notification No. 13 /2018 – Central Tax (Rate) dated 26-07-2018.
ii. If the services supplied by the applicant under cash & carry model are classifiable as ‘services provided by canteen’, whether, CGST (‘Central Goods and Services Tax’) & KGST be chargeable at the rate of 2.5% in terms of entry 7(i) of the notification No. 11/2017-CT (Rate) [as amended vide notification No. 46/2017-CT (Rate) dated 14.11.2017]?
The rate of tax applicable on the above transaction is 2.5% CGST and 2.5% SGST subject to the proviso that credit of input tax charged on goods and services used in supplying the service has not been taken.
FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING KARNATAKA
ORDER UNDER SECTION 98(4) OF THE CENTRAL GOODS & SERVICES TAX ACT, 2017 AND UNDER 98(4) OF THE KARNATAKA GOODS & SERVICES TAX ACT, 2017
M/s Elior India Catering LLP (hereinafter referred as ‘Applicant’ or Elior) is a Limited Liability Partnership firm registered under GSTN with its registered address at #001, 3B, RMZ Ecospace, Marthahalli Outer Ring Road, Belandur, Bangalore 5601032, Karnataka, India. Elior Group is mainly engaged in the business of providing catering services to Corporates, Educational Institutions and range of customers located in the States of Karnataka, Maharashtra and Tamil Nadu. Accordingly, Elior has obtained the registration in respective States in accordance with the provisions of Goods and Services Tax.
2. In Karnataka, the applicant largely provides outdoor catering services to its clients, wherein food is prepared at a central kitchen operated by the applicant, transported to respective client locations and served over there, in terms of the contractual arrangement with the clients. The raw materials/ inputs required for preparation of food are directly sourced and stored at central kitchen. Since the services supplied are in the nature of outdoor catering services, the applicant charges GST at the rate of 18% on the value of consideration, in accordance to Sl. No.7(v) of Notification 11/2017 – Central TRY (Rate) dated 28th June 2017.
3. In certain cases, the applicant operates its business from client premises, where it undertakes preparation and supply of food exclusively at client’s premises in terms of the contractual arrangement entered with the respective clients. In such cases, infrastructure facilities like kitchen space (cooking area), kitchen equipment and utilities such as electricity and water, gas bank area with pipeline, regulator connections etc. are made available to the applicant by the client at their premises (herein after referred to as ‘on-site kitchen’). The applicant sources all raw materials/ inputs required for preparation of food on regular intervals and make its own arrangement for their transportation to the on-site kitchen area.
4. In the instant case, the Applicant has entered into an agreement with M/s. CBRE South Asia Pvt. Ltd (hereinafter referred as VBRE), for providing catering support services at premises of M/s Cisco Systems India Private Limited (hereinafter referred as ‘Cisco). CBRE has been appointed by Cisco for engaging service provider/ s for provision of catering and other support services to Cisco.
5. As per the agreement, the Applicant provides catering support services to Cisco / its employees, from its kitchen located at Cisco premises. Here applicant providing three types of catering services to the CISCO employees.
a. business catering model: The Applicant serves food to employees working on specific shifts (as identified by Cisco), wherein the Applicant receives consideration directly from Cisco on monthly basis (based on quantity of food served).
b. Corporate/ social events model: The Applicant provides catering and allied banquet services at internal events held at Cisco against consideration receivable from Cisco/ Cisco employees responsible for the event, as the case maybe.
c. Cash & Carry model, applicant serves the food to employees of Cisco over the counter, and consideration towards the same is received from the respective employees/ individuals who place the order, at the rates provided in the menu.
6. In light of the aforesaid facts, the applicant has sought to obtain a ruling with regard to the following questions.
i. Whether, in the facts and circumstances of the case, the services rendered by the applicant under cash 86 carry model are in the nature of ‘services provided by canteen’ as per Sl. No. 7(i) or `outdoor catering services’ as per Sl. No. 7(v) of Notification No. 11/2017 – Central Tax (Rate) [as amended vide notification No. 46/2017-CT (Rate) dated 14.11.2017]?
ii. If the services supplied by the applicant under cash 8; carry model are classifiable as ‘services provided by canteen’, whether, CGST (Ventral Goods and Services Tax’) 86 KGST be chargeable at the rate of 2.5% in terms of entry 7(i) of the notification No. 11/2017- CT (Rate) [as amended vide notification No. 46/2017-CT (Rate) dated 14.11.2017]?
7. The applicant made the following factual and legal submissions in relation to the aforesaid questions:
7.1 The applicant submitted that the services provided by him under cash &, carry model are in the nature of services provided by canteen. As per Section 9 of the KGST and CGST Act (hereinafter referred as `GST Act’), KGST and CGST respectively is leviable on supply of goods or services at the rates notified by the Government.
7.2 Further the scope of supply is defined under Section 7 of the said GST Act to inter alia include:
