The AAR, Haryana in the matter of M/S. Jewel Classic Hotels Pvt. Ltd. [Advance Ruling No. HAR/HAAR/R/2019-20/23, decided on June 25, 2020] held that the facilities for food catering, banquet etc. provided in self-owned marriage and party halls by separate entities under common ownership is not covered under ‘outdoor catering’ as per Notification No. 11/2017 Central Tax (Rate), dated June 28, 2017 (‘Services Rate Notification’) (as amended), which is taxable at the rate of 5%.
M/S. Jewel Classic Hotels Pvt. Ltd. (“the Applicant”) is running three separate units at three separate locations, having separate management, i.e. all operations, sales, accounting are being done separately by each separate team. The Applicant has two separate existing Hotel units (Hotel Jewels and Hotel Noor Mahal) and recently started a new unit namely Hazuri Bagh, a party lawn to organize marriage functions, exhibitions or other events. Hazauri Bagh, will take outdoor catering services from Hotel Jewels which is a separate unit, in which no ‘hotel accommodation’ is more than INR 7500/- per unit per day.
The Applicant conducts various parties, marriages and other events in all three units. In these marriages/events in addition of renting of premises & supplying food/beverages the customers can demand some additional arrangements from the Applicant such as flower decoration, orchestra, music DJ, dance floor; special cutlery for serving food; electronic & electric items, such as television for podcasting, projectors, heaters in winter etc.; arrangement of food or beverages from specific vendors etc.
The Applicant regarding tax on supplies, wanted to determine the applicability of the Notification No. 20/2019 Central Tax (Rate), dated September 30, 2019 (“NN. 20/2019”) issued, amending Services Rate Notification in which the rate of tax for outdoor catering has been reduced to GST @ 5%.
The AAR, Haryana in Advance Ruling No. HAR/HAAR/R/2019-20/23, decided on June 25, 2020 held as under:
Serial no. 7 of Services Rate Notification (As amended by NN. 20/2019):
|Sl No.||Heading||Description of Service||Rate||Condition|
(Accommodation, food and beverage services)
|(i) Supply of ‘hotel accommodation’ having value of supply of a unit of accommodation above one thousand rupees but less than or equal to seven thousand five hundred rupees per unit per day or equivalent.||6||–|
|(iv) Supply of ‘outdoor catering’, at premises other than ‘specified premises’ provided by any person other than-
(a) suppliers providing ‘hotel accommodation’ at ‘specified premises’, or
(b) suppliers located in ‘specified premises’.
|2.5||Provided that credit of input tax charged on goods and services used in supplying the service has not been taken [Please refer to Explanation (iv)]|
Clause 2(xxxvi), (xxxiii) and (xxxiv) of Services Rate Notification:
“(xxxiii) ‘Outdoor catering’ 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.
(xxxiv) ‘Hotel accommodation’ means supply, by way of accommodation in hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes including the supply of time share usage rights by way of accommodation.
(xxxvi) ‘Specified premises’ means premises providing ‘hotel accommodation’ services having declared tariff of any unit of accommodation above seven thousand five hundred rupees per unit per day or equivalent.”
We have recently released the 6th Edition of our GST Book titled “GST LAW AND COMMENTARY – WITH ANALYSES AND PROCEDURES”, in a set of 3 Volumes. We thank you all for the support and your enduring response.
Have a look at the complete tour of the Book at: https://rb.gy/3hifj3
Order your copy now and be a part of GST learning excursion in most comprehensive and lucid form !!
This book can be ordered online at: https://rb.gy/benrpb
DISCLAIMER: The views expressed are strictly of the author and A2Z Taxcorp LLP. The contents of this article are solely for informational purpose. It does not constitute professional advice or recommendation of firm. Neither the author nor firm and its affiliates accepts any liabilities for any loss or damage of any kind arising out of any information in this article nor for any actions taken in reliance thereon.