SUPPLY OF FOOD OR DRINK IN A MESS OR CANTEEN IN AN EDUCATIONAL INSTITUTE

GST Rate

Vide Notification No. 11/2017-Central Tax (Rate), dated 28.06.2017 the Central Government fixed various rates of tax for supply of services.  Vide Sl. No. 7 the rates for various supplies in regard to accommodation, food and beverages services under SAC 9963 as detailed below-

(i) 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 drink, where such supply or service is for cash, deferred payment or other valuable consideration, provided by a restaurant, eating joint including mess, canteen, neither having the facility of air - conditioning or central air -heating in any part of the establishment, at any time during the year nor having licence or permit or by whatever name called to serve alcoholic liquor for human consumption. – 6%;

(ii) Accommodation in hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes having declared tariff [includes charges for all amenities provided in the unit of accommodation (given on rent for stay)] of a unit of accommodation of ₹ 1000/- and above but less than ₹ 2500/- per unit per day or equivalent. like furniture, air conditioner, refrigerators or any other amenities, but without excluding any discount offered on the published charges for such unit. 6 %;

(iii) 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, where such supply or service is for cash, deferred payment or other valuable consideration, provided by a restaurant, eating joint including mess, canteen, having licence orpermit or by whatever name called to serve alcoholic liquor for human consumption. – 9%;

(iv) 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, where such supply or service is for cash, deferred payment or other valuable consideration, provided by a restaurant, eating joint including mess, canteen, having the facility of air-conditioning or central air-heating in any part of the establishment, at any time during the year – 9%;

(v) Supply, by way of or as part of any service or in any other manner whatsoever in outdoor catering wherein goods, being food or any other article for human consumption or any drink (whether or not alcoholic liquor for human consumption), as a part of such outdoor catering and such supply or service is for cash, deferred payment or other valuable consideration. 9%;

(vi) Accommodation in hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes having declared tariff of a unit of accommodation of two thousand five hundred rupees and above but less than seven thousand five hundred rupees per unit per day or equivalent. – 9%;

(vii) Supply, by way of or as part of any service or in any other manner whatsoever, of goods, including but not limited to food or any other article for human consumption or any drink (whether or not alcoholic liquor for human consumption), where such supply or service is for cash, deferred payment or other valuable consideration, in a premises (including hotel, convention center, club, pandal, shamiana or any other place, specially arranged for organizing a function) together with renting of such premises.- 9%;

(viii) Accommodation in hotels including fivestar hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes having declared tariff of a unit of accommodation of ₹ 7500/- and above per unit per day or equivalent – 14%;

(ix) Accommodation, food and beverage services other than above – 9%.

The Notification did not impose any condition in availing input tax credit.

Amendment in Notification No. 46/2017-CT (Rate)

The Central Government brought amendment to Sl. No. 7 vide Notification No. 46/2017-CT (Rate), dated 14.11.2017 as detailed below-

• Sl.No. 7(i) has been amended with the reduced tax rate at 2.5% -

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 drink, where such supply or service is for cash, deferred payment or other valuable consideration, provided by a restaurant, eating joint including mess, canteen, whether for consumption on or away from the premises where such food or any other article for human consumption or drink is supplied, other than those located in the premises of hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes having declared tariff of any unit of accommodation of ₹ 7500/- and above per unit per day or equivalent.

The expression ‘declared tariff’ is defined as including charges for all amenities provided in the unit of accommodation (given on rent for stay) like furniture, air conditioner, refrigerators or any other amenities, but without excluding any discount offered on the published charges for such unit.

The said rate is subject to the condition that credit of input tax charged on goods and services used in supplying the service has not been taken.  Wherever a rate has been prescribed in this notification subject to the condition that credit of input tax charged on goods or services used in supplying the service has not been taken, it shall mean that,-

• credit of input tax charged on goods or services used exclusively in supplying such service has not been taken; and 
• credit of input tax charged on goods or services used partly for supplying such service and partly for effecting other supplies eligible for input tax credits, is reversed as if supply of such service is an exempt supply and attracts provisions of section 17(2) of the Central Goods and Services Tax Act, 2017 and the rules made there under. 

• Sl.No. 7(iii) has been amended as follows with tax rate @ 9% with no condition for availing input tax credit-

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, where such supply or service is for cash, deferred payment or other valuable consideration, provided by a restaurant, eating joint including mess, canteen, whether for consumption on or away from the premises where such food or any other article for human consumption or drink is supplied, located in the premises of hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes having declared tariff of any unit of accommodation of ₹ 7500/- and above per unit per day or equivalent.

• Sl. .No. 7(iv) has been omitted.
• In Sl. No. 7(ix), the figure ‘iv’ has been omitted.

Clarification on College hostel mess fee

On the queries received seeking clarification regarding the taxability and rate of GST on services by a college hostel mess, the Board vide its circular No. 28/2/2018-GST, dated 08.01.2018 clarified that-

• The educational institutions have mess facility for providing food to their students and staff. Such facility is either run by the institution/ students themselves or is outsourced to a third person. Supply of food or drink provided by a mess or canteen is taxable at 5% without Input Tax Credit [Serial No. 7(i) of notification No. 11/2017-CT (Rate) as amended vide notification No. 46/2017-CT (Rate) dated 14.11.2017.
• If the catering services is one of the services provided by an educational institution to its students, faculty and staff and the said educational institution is covered by the definition given under para 2(y) of notification No. 12/2017-Central Tax (Rate), then the same is exempt. [Sl. No. 66(a) of notification No. 12/2017-Central Tax (Rate) refers].
• If the catering services, i.e., supply of food or drink in a mess or canteen, is provided by anyone other than the educational institution, then it is a supply of service at entry 7(i) of notification No. 11/2017-CT (Rate) [as amended vide notification No. 46/2017-CT (Rate) dated 14.11.2017] to the concerned educational institution and attracts GST of 5% provided that credit of input tax charged on goods and services used in supplying the service has not been taken, effective from 15.11.2017.

GST on catering services in train

Vide Order No.2/2018-Central Tax, dated 31.03.2018 the Board clarified that with a view to remove any doubt or uncertainty in the matter and bring uniformity in the rate of GST applicable for all kinds of supply of food and drinks made available in trains, platforms or stations, it is clarified with the approval of GST Implementation Committee, that the GST rate on supply of food and/or drinks by the Indian Railways or Indian Railways Catering and Tourism Corporation Ltd. or their licensees, whether in trains or at platforms (static units), will be 5% without IT

Amendment vide Notification No. 13/2018-CT

Vide Notification No. 13/2018-Central Tax (Rate), dated 26.07.2018 the Central Government gave amendment to Sl. No. 7(i) of Notification No. 11/2017-Central Tax (Rate), dated 28.06.2017.   The amended version is as follows-

•  Supply, by way of or as part of any service, of goods, being food or any other article for human consumption or any drink, provided by a restaurant, eating joint including mess, canteen, whether for consumption on or away from the premises where such food or any other article for human consumption or drink is supplied, other than those located in the premises of hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes having declared tariff of any unit of accommodation of ₹ 7500/-and above per unit per day or equivalent. – 2.5% subject to the condition no input tax credit is available.
• Explanation 1 to this provides that this item includes such supply at a canteen, mess, cafeteria or dining space of an institution such as a school, college, hospital, industrial unit, office, by such institution or by any other person based on a contractual arrangement with such institution for such supply, provided that such supply is not event based or occasional.
• Explanation 2 to this provides that this item excludes the supplies covered under sl. No. 7(v) which is the 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 Notification inserted Sl. No. 7(ia) as follows-

• Supply, of goods, being food or any other article for human consumption or any drink, by the Indian Railways or Indian Railways Catering and Tourism Corporation Ltd. or their licensees, whether in trains or at platforms. – 2.5% subject to the condition that the input tax credit is not available.

Withdrawal of circular/order

 Vide Circular No. 50/24/2018-GST, dated 31.07.2018 the Central Government withdrew the -

• Circular No. 28/02/2018-GST dated 08.01.2018 as amended vide Corrigendum dated 18.01.2018
• Order No 02/2018–Central Tax dated 31.03.2018

with effect from 27.07.2018 since-

• consequent to the decisions of 28th GST Council Meeting held on 21.07.2018,, the contents of the Circular No. 28/02/2018-GST dated 08.01.2018 as amended vide Corrigendum dated 18.01.2018 have been incorporated in Sl. No. 7 (i) of the Notification No. 13/2018-Central Tax(Rate), dated 26.07.2018 amending the Notification No. 11/2017-Central Tax (Rate) dated 28th June 2017.
• the contents of the Order No 02/2018-Central Tax dated 31.03.2018 have been incorporated in Sl. No. 7(ia) of the Notification No. 13/2018-Central Tax(Rate), dated 26.07.2018 amending the Notification No. 11/2017-Central Tax (Rate) dated 28th June 2017.