In re Smt. Natrajan Jothilakshmi (Jothi Catering Services) (GST AAR Tamilnadu)
The case of In re Smt. Natrajan Jothilakshmi (Jothi Catering Services) (GST AAR Tamilnadu) involves a request for an advance ruling on the GST rate and HSN code for outdoor catering services provided by Jothi Catering Services. The applicant sought clarification on whether their service of supplying food and beverages to industrial workers under a contractual arrangement would be classified under ‘Outdoor Catering’ and the applicable GST rate and HSN code for the same.
Applicant’s Claim: JCS requested clarification on the following:
- Rate of Tax: They were unsure if their service attracts 5% GST (without Input Tax Credit – ITC) or 18% GST (with ITC).
- HSN Code: They wanted to know the relevant HSN code for their activity.
The Authority for Advance Ruling (AAR) in Tamil Nadu concluded that the applicant’s service does not fall under ‘Outdoor Catering’ as defined by the GST law, which is typically for event-based and occasional nature services like those provided at exhibition halls, events, conferences, marriage halls, and similar functions. Instead, the AAR classified the applicant’s service under ‘Other Contract Food Services’ with the Service Accounting Code (SAC) 996337. This classification is meant for services based on contractual arrangements with the customer at specified locations other than for transportation companies, on an ongoing basis.
The ruling further determined that since the service provided by Jothi Catering Services does not fall into the specific categories of ‘restaurant service’, ‘outdoor catering’, or ‘hotel accommodation’, it would be categorized under a residual entry which attracts a GST rate of 9% CGST and 9% SGST, totaling an 18% GST rate.
The AAR’s decision is based on the understanding that the applicant’s service of supplying prepared food and beverages does not involve distribution at the client’s premises and is thus considered a supply of service. The service is deemed to fall under the ‘Other Contract Food Services’ category, which is distinct from ‘Outdoor Catering’ as it involves a contractual arrangement for providing food services to industrial or commercial locations on a regular basis, not linked to specific events or occasions.
Authority’s Response:
The AAR provided the following interpretations:
