GST Rate & HSN / SAC Code for Canteen in Factory

[Abhijeet Shinde]

Dear All ,

Company entered in to a contract with a caterer for supply of food in the factory. Only Premises is provided free of cost to caterer. All Material, kichen equipment, Gas, electricity and labour for cleaning by Caterer only. Company not recovers food cost from the employees throgh salary.

Kindly Confirm GST Rate & HSN / SAC Code for bill by caterer and please also confirm can company get input tax credit ?

[KASTURI SETHI]

SAC 996333 ITC not allowed. Rate 18%

[Abhijeet Shinde]

Thanks Sir,

I was search SAC 996333 , it shows 12% for Non AC & 18% for AC

Please clarify me on same.

Abhijeet

[Rajagopalan Ranganathan]

Sir,

If you canteen is air-conditioned then gst rate is 18%. Otherwise it is 12%. According to Section 17 (5) (b) of CGST Act, 2017 input tax credit shall not be available in respect of food and beverages, outdoor catering, beauty treatment, health services, cosmetic and plastic surgery except where an inward supply of goods or services or both of a particular category is used by a registered person for making an outward taxable supply of the same category of goods or services or both or as an element of a taxable composite or mixed supply.

[Rajagopalan Ranganathan]

Sir,

Please read 'you' as 'your'. the error is regretted.

[KASTURI SETHI]

Pl.go through recent amendment's in this aspect after the meeting of GST Council held on 5.8.17 and another meeting in August. If in you business premises there is one A.C and you are serving food etc. in non- A.C. area, even then higher rate will be applicable which is 18 %. Your business premises should be completely non- AC. In real situation Govt

Wants higher rate of tax.

[Guest]

Kindly Confirm GST Rate & HSN / SAC Code for bill by caterer and please also confirm can company get input tax credit ?

AI Summary

GST rate for canteen services varies by air conditioning status; input tax credit generally disallowed for food and catering services. Catering services in a factory are classified under SAC 996333 and attract a lower rate only when provided in wholly non air conditioned business premises; any presence of air conditioning in the premises triggers the higher AC catering rate. Input tax credit on food, beverages and catering is generally disallowed by Section 17(5)(b) of the CGST Act, except where the inward supply is used to make an outward taxable supply of the same category or is part of a taxable composite or mixed supply.