TaxTMI 
TaxTMI 
2019 (10) TMI 562
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.... prepared at a central kitchen operated by the applicant, transported to respective client locations and served over there, in terms of the contractual arrangement with the clients. The raw materials/ inputs required for preparation of food are directly sourced and stored at central kitchen. Since the services supplied are in the nature of outdoor catering services, the applicant charges GST at the rate of 18% on the value of consideration, in accordance to Sl. No.7(v) of Notification 11/2017 - Central Tax (Rate) dated 28th June 2017. 3. In certain cases, the applicant operates its business from client premises, where it undertakes preparation and supply of food exclusively at client's premises in terms of the contractual arrangement entered with the respective clients. In such cases, infrastructure facilities like kitchen space (cooking area), kitchen equipment and utilities such as electricity and water, gas bank area with pipeline, regulator connections etc. are made available to the applicant by the client at their premises (herein after referred to as 'on-site kitchen'). The applicant sources all raw materials/ inputs required for preparation of food on regular intervals and ....
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....rvices provided by him under cash & carry model are in the nature of services provided by canteen. As per Section 9 of the KGST and CGST Act (hereinafter referred as 'GST Act), KGST and CGST respectively is leviable on supply of goods or services at the rates notified by the Government. 7.2 Further the scope of supply is defined under Section 7 of the said GST Act to inter alia include: * all forms of supply of goods or services such as sale, transfer, etc. for a consideration made in the course or furtherance of business * activities specifically to be treated as supply of goods or services as referred to in Schedule Il of the GST Act * As per Sl. No. 6 of Schedule II of the GST Act, the following composite supplies shall be treated as a supply of services, namely: * "(a) ..................... * (b) supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (other than alcoholic liquor for human consumption), where such supply or service is for cash, deferred payment or other valuable consideration." 7.3 The applicant submitted that above entry clearly postulates that suppl....
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.... services other than (i), (ii), (iii), (iv), (v), (vi), (vii) and (viii) above 9% 7.4 Applicant further submitted that he mainly provides outdoor catering services (wherein food is prepared at central kitchen and served at client location) as per the contractual arrangement with respective clients. These services are in the nature of outdoor catering services and hence chargeable to CGST & SGST at the rate of 18% as per Sl. No. 7 (v) of Notification 11/2017 - Central Tax - Rate dated 28th June 2017. 7.5 Further, the applicant submitted that the services provided at onsite kitchen under business catering model and corporate/ social events model as 'outdoor catering services'. However, in case of services supplied under cash & carry model, the applicant undertakes preparation as well as supply of food from the cafeteria at client's location. Therefore, applicability of Sl. No. 7(i) of the Notification 11/2017 - Central Tax (Rate) read with Notification 46/2017 - Central Tax (Rate) (i.e. services by way of supply of food by canteen), would have to be examined in this case. 7.6 The applicant submitted that the term canteen is neither defined under GST Law nor under Chapter ....
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....nature of outdoor catering services. He drew reference from relevant provisions under the Chapter V of the Finance Act, 1994 (erstwhile Service Tax law) as follows: Caterer is defined Section 65 (24) of the Service Tax Law as "any person who supplies, either directly or indirectly, any food, edible preparations, alcoholic liquor or non-alcoholic beverages or crockery and similar articles or accoutrements for any purpose or occasion" Section 65(76a) defines "Outdoor Caterer" as "a caterer engaged in providing services in connection with catering at a place other than his own but including a place provided by way of tenancy or otherwise by the person receiving such services." Section 65(105)(zzt) defines "Outdoor Catering Service" as "any service provided to any person, by an outdoor caterer." 7.11 The applicant submitted that in terms of the above provisions of the erstwhile Finance Act, the following could be inferred: (a) The person providing outdoor catering services should be engaged in supply of food, edibles, beverages or crockery and similar articles or accoutrements. (b) Supply to be for any purpose or occasion. (c) The supply may be directly by the person himse....
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....ant also submitted additional submissions in support of his claim that the taxability of each service provided under a contract should be determined independently. In support of his argument, the applicant stated that he is mainly engaged in providing outdoor catering services and in certain cases, the applicant has entered into contractual arrangements with clients for providing services under different models. Even though services provided by the applicant under different models emanate from the same contract, all of them have to be examined independently and taxability of such services should be determined based on the nature of each service and not the whole contract. In support of his contention, the applicant has placed reliance on the decision of the Hon'ble CESTAT, Mumbai in the case of M/s. Greenwich Meridian Logistics India Pvt. Ltd v. Commissioner of Service Tax, Mumbai [2016 (43) STR 215 (Tri-Mumbai)] = 2016 (4) TMI 547 - CESTAT MUMBAI wherein it was held that - "7. Each source of income must be looked at independently. A service provider is not necessarily a specialist in rendering one service; the earnings of a service entity may accrue from one or more services - s....
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....ng and classifying such transactions as outdoor catering. 7.17 The applicant also argued that the supplies undertaken by the applicant under cash and carry model are on par with supplies undertaken by any other canteen, eating joint or restaurant in that the applicant undertakes to prepare and service the food at the client's location, the raw materials or inputs are directly procured and stored in the kitchen area and the required manpower are employed to manage the entire operations at such premises. In addition, the applicant maintains its own menu card offering variety of foods to the customers or the employees of CISCO and accordingly, the mode of consideration whether paid through the employees or employer will not be relevant to determine the classification of services. In view of the above, the applicant maintains that the arrangement by the applicant at the client's premises partakes the character of a "canteen/ cafeteria". PERSONAL HEARING / PROCEEDINGS HELD ON 23/04/2018 8. Sri. Harish B, Advocate and duly authorised representative of the applicant appeared for personal hearing proceedings held on 23.04.2018, reiterated the facts narrated in their application and subm....
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....ean a reference to the same provisions under the KGST Act. 9.3 The contentions and the arguments of the applicant are examined and found that the applicant has entered into a contract which envisages three types of supplies and the same are as under: (a) Business Catering Model - wherein the applicant serves the food to employees working on specific shifts and the consideration is received from the employer directly on monthly basis. (b) Corporate/ Social Event catering model - wherein the applicant provides catering and allied banquet services at internal events held at the employer's place against a consideration received from the employer or the employee responsible for the event, as the case may be. Both these models are not a part of the question raised in the present application and hence not discussed. (c) Cash and Carry Model: Under this model, the food is served to employees over the counter and consideration towards the same is received from the respective employees or individuals who place the order, at the rates provided in the menu. Though the menu is decided in agreement with the employer, invoices are issued under the GSTIN of the applicant to individual emp....
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....n those located in the premises of hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes having declared tariff of any unit of accommodation of seven thousand five hundred rupees and above per unit per day or equivalent. Explanation 1. - This item includes such supply at a canteen, mess, cafeteria or dining space of an institution such as school, college, hospital, industrial unit, office, by such institution or any other person based on a contractual arrangement with such institution for such supply, provided that such supply is not event based or occasional." The careful perusal of this entry states that a supply of food or any other article of human consumption or drink to be covered under this entry should not be provided in a premises of a place where the declared tariff is more than Rs. 7500/- per day which is satisfied. But the issue is whether the applicant is a restaurant or eating joint including mess or canteen. The Explanation 1 states that the even the supply made by a person other than the institution based on a contractual arrangement with such institution for such supply is also included. Hence, it can b....
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....occasional in nature" The transactions relating to cash and carry model are examined and found that since the supply is neither event based nor occasional nature, the same does not get covered under the entry 7(v). Going back to the entry no. 7 (i), the explanation 1 only says the transactions which are included in the said entry. It does not limit the operation of entry no. 7 (i) and hence the entry no. 7 (i) is again considered: "(i) Supply, by way of or as part of any service, of goods, being food or any other article for human consumption or any drink, provided by a restaurant, eating joint including mess, canteen, whether for consumption on or away from the premises where such food or any other article for human consumption or drink is supplied". Whether the applicant is a restaurant or eating joint for the purposes of this entry is the moot question. Here it is seen that the applicant is preparing the food items at the place and is selling the goods to the purchasers. Hence this amounts to sale of food items for consumption either in the premises or away from the premises. There is no condition in the entry that the premises should be own. It only mentions that the premi....