TaxTMI 
TaxTMI 
2018 (5) TMI 598
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....LATFORM (WITH A/C)/FOOD STALLS ON THE RAILWAY PLATFORM (WITHOUT A/C) a. In these places, food and beverages (packed/MRP/cooked) are supplied to the passengers/general public at the rates fixed by Indian Railways/IRCTC. Food plaza has space for the consumer to consume the said items on premises, if he so wish. Food stalls also has a small counter offering the consumers to use the same and consume the food. Else, the consumer may take away the same and consume as per his wish. (B) SUPPLY OF FOOD ON BOARD THE RAJDHANI TRAINS a. In the Rajdhani trains, menu for the purpose of supplying food items/beverages is fixed by IRCTC, with respect to each class of travel preferred by the passengers. The Bid Document for services in such trains specifically provides tariff for meals supplied. The above-mentioned document also provides defined "MENU" as per which, meals are supplied to passengers. Food is supplied and served to the passengers and money for the same charged from the Indian Railways/IRCTC by the Applicant. b. Further, in some cases, IRCTC supplies some items of dinner/lunch menu from its own base kitchens/approved sources, to be picked-up by the r....
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....ntry in Column (3) at S. No. 7 of Notification No 11/2017 - Central Tax (Rate) dated 28.06.2017 vide Notification No. 46/2017 -Central Tax (Rate) dated 14.11.2017, supply of any food article/beverage in any manner, whatsoever, for consumption on or away from the premises is taxable at the rate of 2.5%. In this case, food is supplied by waiters on premises of a running train. Thus, the supply of food falls under the above said category and is taxable under CGST @ 2.5 % and Delhi GST @ 2.5 %. IGST, wherever is applicable, is applicable at the rate of 5%. (iii) In respect of supply of newspaper, it is submitted that the same being exempt vide Entry at S. No. 120 of Notification No. 2/2017 - Central Tax (Rate) dated 28.06.2017, Entry at S. No. 120 of Notification No. 2/2017 - Integrated Tax (Rate) dated 28.06.2017 and Entry at S. No. 120 of Notification No. 2/2017 -State Tax (Rate) dated 30.06.2017, no tax is payable. 5. Comments of Jurisdictional Officer (CGST): With respect to supply of food in Food Plaza/Food Stalls : For the purpose of this activity, the applicants perusal of relevant portion in entry in column (3) at S. No. 7 entry (i) of Notification No. 46/2017....
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.... that credit of input tax charged on goods and services used in supplying the service has not been taken [Please refer to Explanation no. (iv)] Explanation:- For the purposes of this notification,- (iv) Wherever a rate has been prescribed in this notification subject to the condition that credit of input tax charged on goods or services used in supplying the service has not been taken, it shall mean that,- (a) credit of input tax charged on goods or services used exclusively in supplying such service has not been taken; and (b) credit of input tax charged on goods or services used partly for supplying such service and partly for effecting other supplies eligible for input tax credits, is reversed as if supply of such service is an exempt supply and attracts provisions of sub-section (2) of section 17 of the Central Goods and Services Tax Act, 2017 and the rules made thereunder. S. No. Chapter, Section or Heading Description of Service Rate (per cent.) Condition (1) (2) (3) (4) (5) 7 Heading 9963 (Accommodation, food and beverage services) (v) Supply, by way of or as part of any service or....
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....arriage halls and other outdoor/indoor functions 85 996335 Catering services in trains, flights and the like 86 996336 Preparation or supply services of food, edible preparations, alcoholic and non-alcoholic beverages to airlines and other transportation operators 87 996337 Other contract food services 88 - 996339 Other food, edible preparations, alcoholic and non alcoholic beverages serving services nowhere else classified 7. The S.No. 120 of Notification No. 2/2017 Central Tax (Rate) dated 28.06.2017 and parallel Notifications of IGST and Delhi GST reads as under: Schedule S. No. Chapter/Heading/Sub-heading/Tariff item Description of Goods (1) (2) (3) 120. 4902 Newspapers, journals and periodicals, whether or not illustrated or containing advertising material DISCUSSIONS: 8. The applicant has submitted a copy of 'Letter of Award' dated 02.08.2016 issued by IRCTC to them for setting up of and to operate 'Fast Food Unit' at Old Delhi Railway Station on payment of specified annual licence fee. The applicant has submitted that food and beverages (packed/MRP/cook....
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....there are three transactions, one between the passengers and the Indian Railways, second between Indian Railways and IRCTC and third between IRCTC and the applicant. We are concerned only with the third transaction in this case i.e. between IRCTC and the catering contractor. The applicant raises invoice to IRCTC showing separate value of food & beverages, newspaper and services, in respect of number of passengers who actually boarded the train. 11. Similarly, the applicant has submitted a copy of agreement dated 07.08.2017 between IRCTC and the applicant for temporary licence to manage on board catering services on Duronto Express Train. The said agreement is similar to the agreement for on-board catering on Rajdhani Trains as mentioned above. 12. The applicant has also submitted a copy of Master Licence agreement dated 05.01.2015 between North Eastern Railway and the applicant for provision of pantry car/catering services in Shiv Ganga Express Train. Under the scope of 'Catering services on Train' in the said agreement, it is mentioned that the applicant shall supply and service of fully cooked meals/food to passengers on demand viz. breakfast, lunch, dinner, snacks ....
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....are available in the case of supply of food and beverages on board the trains. 'Composite supply' is defined in Section 2 (30) of the CGST Act, 2017 as follows: "composite supply" means a supply made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both, or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply; Illustration.- Where goods are packed and transported with insurance, the supply of goods, packing materials, transport and insurance is a composite supply and supply of goods is a principal supply; 15. From the above, it is observed that though a composite supply of various goods not involving services would be covered as a composite supply under Section 2(30) of the CGST Act, 2017 but still it would not be considered as a supply of services under Section 7(1) (d) of CGST Act, 2017 r/w Point 6 of Schedule II of the Said Act, because it is not covered in clause (b) of Point 6 of Schedule II. Only a composite supply containing services can be considered as supply of services. 16. ....
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....ervice of providing hotel accommodation. * AS star hotel is booked for a conference of 100 delegates on a lump sum package with the following facilities: * Accommodation for the delegates * Breakfast for the delegates * Tea and coffee during conference * Access to fitness room for the delegates * Availability of conference room * Business centre As is evident, a bouquet of services is being provided, many of them chargeable to different effective rates of tax. None of the individual constituents are able to provide the essential character of the service. However, if the service is described as convention service, it is able to capture the entire essence of the package. Thus, the service may be judged as convention service and chargeable to full rate. However, it will be fully justifiable for the hotel to charge individually for the services as long as there is no attempt to offload the value of one service on to another service that is chargeable at a concessional rate. Whether the services are bundled in the ordinary course of business, would depend upon the normal or frequent practices followed in the area of bu....
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....utes the principal supply so as to determine the right classification and rate of tax of such composite supply. 17. It is observed that the various goods and services supplied by the applicant have separate values, no supply is principal supply and various components of supply are not naturally bundled. Accordingly, the contract between IRCTC and the applicant does not appear to be a composite contract for supply of good and services. Hence, Section 7(l)(d) of the CGST Act, 2017 and Point 6 of Schedule II of the said Act are not applicable. Hence, it is not possible to classify the whole contract as supply of services. 18. The Applicant has referred to the High Court of Delhi judgement dated 19.07.2010 in the case of IRCTC V/s Government of NCT of Delhi reported in 2010 (20) STR 437 (Del) to argue that supply of food on board the trains cannot be considered as outdoor catering service. It has been held by the Hon'ble High Court that providing of food, snacks and water to passengers on board trains is different from outdoor catering service. The IRCTC or passengers have no choice of articles or quantity served as the same is supplied as per menu fixed by Railway Board. The....
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....es are covered under Service Code (Tariff) 996335 in Group 99633 of heading 9963 of Annexure/Scheme of Classification of Services as "catering services in train". The same are covered under S. No. 7 (ix) of Notification No. 11/2017 - Central Tax (Rate) dated 28.06.2017 as amended vide Notification No. 46/2017 - Central Tax (Rate) dated 14.11.17 and parallel Notifications of IGST and Delhi GST. A train is a mode of transport and hence cannot be called as a restaurant, eating joint, mess or canteen etc. and hence catering services provided on-board a train are not covered under S. No. 7 (i) of the said Notifications as claimed by the applicant. The supply of goods i.e. food, bottled water etc. shall be charged to GST on value of goods (excluding the service charges) at applicable rates as pure supply of goods, as the same have no element of service. The supply of newspaper is separately invoiced and hence it shall be at 'Nil" GST under S. No. 120 of Notification No. 2/2017- Central Tax (Rate) dated 28.06.2017 and parallel Notifications of IGST and Delhi GST. 24. In the case of supply of food and beverages (cooked/MRP/packed) on board the Mail/express trains by the applicant di....