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 ?

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.