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

Outdoor catering supply: third-party mess services to educational institutions attract reduced GST without input tax credit.
Third party operators who prepare and supply meals to an educational institution are supplying catering services to the institution, and where the supply is made by anyone other than the educational institution it attracts a reduced GST rate provided the supplier has not taken input tax credit; if the educational institution itself supplies the mess service and falls within the notification definition for educational entities, the supply is exempt. Registration obligations for the catering operator follow normal turnover thresholds.