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2019 (10) TMI 562
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....rvices to its clients, wherein food is 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 prepa....
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....ns in relation to the aforesaid questions: 7.1 The applicant submitted that the services 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 servi....
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....part of such outdoor catering and such supply or service is for cash, deferred payment or other valuable consideration 9% - (ix) Accommodation, food and beverage 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 28^th 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 b....
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....per the circular is equally applicable to cases where canteen operations have been outsourced by any entity. 7.10 The applicant further submitted that under the cash & carry model are not in the 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 outdo....
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....ew of the above, the applicant argues that the services provided by him under cash & carry model are not in the nature of outdoor catering services and hence, not taxable under Sl. No. 7 (v) to Notification 11/2017 - Central Tax (Rate). 7.14 The applicant 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....
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....by canteen". Hence the applicant argues that his activities of operating and maintenance of the canteen at client premises, the supply of food from canteen to employees under cash and carry model should be chargeable to GST at the rate of 5% vis-ä-vis considering 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 "cante....
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....nt, and relevant facts. 9.2 At the outset, we would like to state that the provisions of both the CGST Act and the KGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean 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 f....
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.... amendment reads as under: "(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, other than 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 pl....
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....tion No. 11/ 2017 - Central Tax (Rate) dated 28.06.2017. 9.8 Entry No. 7(v) of the amended Notification is verified and found that the entry reads as under: "(v) Supply, by way of or as a part of any service, of goods, being food or any other article for human consumption or any drink, at Exhibition Halls, Events, Conferences, Marriage Halls and other outdoor or indoor functions that are event based and 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". W....