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18% GST Rate on Indoor/Outdoor Catering Services

Posted @ February 24, 2019, 7:10 am under (GST Compliances)

18% GST Rate for event-based and occasional Indoor/Outdoor Catering Services:

The Central Board of Indirect Taxes and Customs (CBIC) has notified vide Notification No. 13/2018-Central Tax (Rate) 26 th July, 2018 made the following changes:

 

GST Rate for Restaurant Services

That 5% tax is applicable to catering services rendered by restaurant, mess, canteen, eating joints and such supplies to institutions to contractual basis.
 

The notification issued by the Board said that five percent of tax applicable to 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 take away from the premises where such food or any other article for human consumption or drink is supplied.


GST Rate for Outdoor Catering those are event-based and occasional in nature. SAC No. 9963(v).

 

The Govt. made it clear that the scope of outdoor catering under entry 7(v) in case of outdoor/indoor functions that are event-based and occasional in nature will attract 18% GST rate.

Though ITC is allowed when GST is charged @ 18%, the impact of ITC is unlikely to be more than 3 to 4% and consequently, the difference in the GST rates, i.e. 18% with ITC and 5% without ITC, could work out to a substantial 9 to 10%.

 

GST Rate for Bundled Supply

A bundled supply is a combination of goods and/or services taxed @ 18%. For example, combination of hall booking, food, music system, decoration and other services.

To determine taxability in case of bundled supplies, they have to be identified as either ‘composite supply’ or ‘mixed supply’. If a transaction is ‘composite supply’, it shall be treated as a supply of the principal supply. If it is a ‘mixed supply’, it shall be treated as supply of that particular supply which attracts the highest rate of tax.

 


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