Facts:
Bengal Rowing Club (“the Appellant“) is a non-profit making company engaged in providing its members privileges and amenities such as swimming facility, gymnasium, indoor games, restaurant service, etc. The Appellant also provides other services like supply of food from restaurant, services in restaurant like booking of personal dining area, supply of food at events organised in the club premises like get-togethers and parties hosted by members of the club, supply of other services being part of organising the get-togethers and parties in the club premises like valet parking charge, decoration charge, music charges. Etc., and other services provided by the club.
The Appellant earlier filed advance ruling before the WBAAR, wherein it was pronounced that the supply of food, by way or as part of any service or any other manner whatever, from the appellant’s restaurant were classifiable under SAC 9963 and taxable under Sr. No. 7(i) or7(iii) of the Notification no. 11/2017-C.T (Rate) dated June 28, 2017 under the CGST Act, 2017 & Notification No. 1135-FT dated June 28, 2017 under the West Bengal Goods and Services Tax Act, 2017 (“Rate Notification”). If food was supplied by way of or as a part of the services associated with organisation of social events at the club premises, it would be classifiable under SAC 9963 and taxable under Sr. no. 7(vii) of the Rate Notification.
The appellant had filed an instant appeal against the above advance ruling on grounds that food supplied for social gatherings could not be categorised as composite services rather it is taxable at the rate of 18%. The club raised separate bills for food and beverages for social gatherings.
Issues involved:
What is the rate of tax on supply of food at event organized in the club premises like get-togethers and parties hosted by member of club?
Held:
The Hon’ble AAAR, West Bengal vide Appeal Case No. 07/WBAAAR/APPEAL/2019 dated July 8, 2019 held as under:
- Serial no.7(v) of the Rate Notification squarely covers any supply of food or beverage at any event, whether or not served at an outdoor or an indoor function. A social get-together held at the Club premises as explained by the Appellant, is “an event or a function” of occasional nature. An “event” is a planned public or social occasion whereas, a “function” means an official ceremony or a formal social event, such as a party or a special meal, at which a lot of people are usually present. The provisions of serial no.7(v) of the Rate Notification is not restricted to Exhibition Halls or Marriage Hails and includes all indoor and outdoor functions.
- The services provided by the Club at these social get-togethers are not regular restaurant services as envisaged from the submissions made by the Appellant. So, the supplies at events which are occasional in nature like the social get-togethers arranged at the Club premises will unambiguously fall under serial no. 7(v) of the Rate Notification.
Therefore, the supply of food at events organised by the Appellant in the club premises is taxable under serial no. 7(v) of the Rate Notification and attract GST @18%.
Citation: [2019] 108 taxmann.com 4 (AAAR-WEST BENGAL)
Important Provisions:
Entry at Serial No. 7(v) (SAC 9963):
Supply, by way of or as part of any service, of goods, being food or any other article for human consumption or any drink, at Exhibition halls, Events, Conference, Marriage Halls and other outdoor/ indoor functions that are event based and occasional in nature.