Service by outside canteen operators-Outdoor catering or Supply of Food

[ROHIT GOEL]

Hi Sir,

One of our client is a trust institution operating colleges. The institution has contracted with outside vendors for operating a canteen at its hostel premises wherein the vendors operate the kitchen, obtain all vegetables and thereafter also operate the hostel mess. The charges for such services are payable to the vendors on the basis of a fixed per meal charges. Charges for such hostel mess are collected from students upfront on lump sum basis.

My query is whether this would constitute service of outdoor catering by the outside vendor and hence chargeable to GST @18% or suuply of food items and chargeable to 5% without ITC.

Further, whether the institution needs to collect GST on such mess charges from the students in light of circular no. 28/02/2018-GST as per which 5% GST needs to be collected.

AI Summary

Trust Institution's Canteen Services: Is It Outdoor Catering or Food Supply? GST Implications Under Review. A trust institution operating colleges has engaged outside vendors to manage a canteen at its hostel, charging students on a lump sum basis. The query concerns whether this arrangement constitutes outdoor catering, subject to 18% GST, or simply the supply of food, subject to 5% GST without input tax credit (ITC). Responses indicate that the vendor acts as a contractor-cum-outdoor caterer, and the institution's role in collecting charges from students suggests it supplies services to students. According to relevant GST circulars, if the institution provides catering as part of its services, it may be exempt from GST; otherwise, a 5% GST applies.