Composite Tax Dealer - Canteen

[Praveen Nair]

Dear Experts,

Kindly suggest whether Canteen Services Provider, an outside agency providing exclusive service to a factory - providing food to the employees, be registered as a Composite Tax Dealer?

Currently he is registered as a Outdoor Catering Service provider and charges GST at applicable rate.

Thanks

Pravin Nair

[Alkesh Jani]

Sir, In this regards, my point of view is that, person supplying outdoor catering service cannot opt for composition scheme in terms of Section 10(2)(a) of the CGST Act,2017. This query is raised with regards to sub-clause (b) of Para 6 of Schedule –II. The said sub-clause deals with registered place of business and supply is also made from the registered place of business (Restaurant Services). However, in case of outdoor catering service the supply of service is at the place as agreed upon by the recipient of service.

Our expert may correct me if mistaken

[Parimal Kulkarni]

Dear Pravin,

I am of the view that an outdoor caterer can apply for composition Scheme. If we refer to schedule II, paragraph 6 clause (b), it nowhere restricts the entry to outdoor caterers for composition scheme so long as the turnover does not cross the threshold limits (and in this case the factory is okay with the caterer being under composition).

[YAGAY andSUN]

We endorse the view of Mr. Kulkarni as there is no restriction prescribed in schedule II.

AI Summary

Composition scheme eligibility for outdoor catering may be available depending on service classification and turnover threshold. Whether an outside agency supplying food exclusively to a factory qualifies as a composition tax dealer is disputed: one view denies composition eligibility for outdoor catering on the basis that such supplies are not made from the registered place of business and align with restaurant-type supplies; the contrasting view notes no explicit Schedule prohibition and maintains outdoor caterers may opt for composition provided they satisfy the scheme's turnover and other statutory eligibility conditions.