Canteen Service Provider

[Saurabh Singh]

I am running a canteen inside the premises of a Pvt. Ltd. Company. What are my obligation in GST ? I have to provide food at subsidized rates to the employees for which I also get some amount from the company.

Plz advice

[RAMESH PRAJAPATI]

You will have to take GST Registration if turnover exceeds 20 lacs and after that you have to pay GST on the open market value of the food of the same / similar quality.

[Rajagopalan Ranganathan]

Sir,

Sl. No. 7 (i) of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 indicates that "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 is chargeable to CGST @6%.

Sl. No. 7 (iii) of Notification No. 11/2017-Central Tax (Rate) dated 2806.2017 indicates that "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 or permit or by whatever name called to serve alcoholic liquor for human consumption is chargeable to CGST @9%.

Sl. No. 7 (iv) of Notification No. 11/2017-Central Tax (Rate) dated 2806.2017 indicates that "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 is chargeable to CGST @ 9%.

Sl. No. 7 (v) of Notification No. 11/2017-Central Tax (Rate) dated 2806.2017 indicates that "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 is chargeable to CGST @ 9%.

The CGST is chargeable on the transaction value of the food supplied.

 

[RAMESH PRAJAPATI]

Yes, but the transaction value cannot be accepted as assessable value for tax calculation if price is not sole consideration {Section 15(1) of CGST}.

[Rajagopalan Ranganathan]

Sir,

By transaction value I meant the cost of the food not the subsidized rate of food.

[Himansu Sekhar]

The tax will be on the cost plus the subsidy given by the company.

[Saurabh Singh]

Thank you experts for your valuable opinion.

Sir. please advice me on following issue:- If subsidized value of food is 20 and the open market value of the same is 100.I have to charge gst on rs.20 from the employees or on rs 100.

Option A			Option B
Food	20		Food	20
Add:-			Add:-
CGST	0.9		CGST (4.5% 0f ₹ 100)	4.5
SGST	0.9		SGST (4.5% of rs. 100)	4.5
Total	21.8		Total	29

Please advice.

Further if i can only charge gst on subsidized value then will i have to pay the remaining tax without collecting the same from employee.

[Saurabh Singh]

Rate of tax given in the notification is 9 %. The rate would be CGST 9 % and SGST 9%. Please consider the above example by considering this tax rate.

[KASTURI SETHI]

Rate of GST is 9 % + 9 %. You have seen 9 % under CGST notification. No dispute is about SGST 9 %. The benefit of subsidy is available if you receive subsidy from. Govt. You would pay from your pocket.

[Brijesh Singh]

I am running a canteen inside the premises of IOCL.

In my contract this clause is given "The quoted rates shall be valid till the validity of the contract. All the rates shall be inclusive of all taxes, octroi, duties, surcharges, levies, transportation etc. and no extra cost will be paid by the Corporation on this account. Only Service Tax shall be payable extra as applicable. Works Contract Tax/ Sales Tax/ VAT applicable (existing or fresh) has to be borne by the contractor."

According to the above quate should i get GST back on food bills?

AI Summary

GST on canteen food: taxable at applicable restaurant rates; registration and assessable value rules govern subsidy treatment. Canteen food supplied for consideration is taxable under GST as restaurant/eating joint supplies, with liability measured by the transaction or open market value rather than the subsidised price. Employer subsidies that constitute valuable consideration must be included in the assessable value, and suppliers must register for GST once turnover exceeds the statutory threshold; applicable notified rates and central/state components determine the tax payable.