GST on Supply of Food in Canteens of Offices, Factories, Hospitals, Colleges & Industrial Units

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17 May 2019

Supply of food in canteens of offices, factories, hospitals, colleges, industrial units etc. on contractual basis excepting that supply is not event based or on specific occasions, constitute supply of service in terms of amended notification no.13/2018-Central Tax (rate) dated 26.7.18 and is taxable at the rate of 5%. The supplier in such case is not eligible for the input tax credit as per the condition stipulated therein. As per serial no 7(i) of notification no. 13/2018-CT (rate).

Canteen services provided in organizations like Reliance, TCS, etc., wherein the food is cooked in the premises of the company and “sold” to the employees of the said organization at an agreed price mutually agreed upon, it is done on a regular daily basis.

Providing services of serving food – breakfast, lunch & dinner and any other food requirements from a mess/dining hall to the trainees of the training institution of banking such as Andhra Bank Staff College, RBI Training Institute etc. Even here, the food is prepared and sold/served to the trainees in the premises, where the trainees attend a residential programmer and there are rooms for accommodation with in the premises for the trainees.

In the educational institutions- the applicant in some institutions also operate the canteen for the day scholar students and staff wherein food is prepared in the canteen and sold for consumption by the students/staff. In the so called student/staff canteen, certain bought out items like ice creams, soft drinks, biscuit packets etc. wherein the maximum retail price is printed on the item is also sold for consumption by the students/staff.