M/s “Merit Hospitality Services (P.) Ltd. (“the Applicant”) is engaged in the business of supply of goods, being food and any other article for human consumption or drink. The food is prepared at the location of applicant and then distributed to various companies at different locations (including in SEZ area).
The Applicant sought clarification primarily as to:
- Whether the activity undertaken by the applicant can be called as canteen activity and the applicabe rate of 5% be charged on their bill?
- Can applicant claim that food being supplied to employees of SEZ unit, for which employees of SEZ unit directly make payment, is a supply made to SEZ unit and hence no GST payable?
In view of the facts declared by the applicant service being provided by company would clearly fall under Group 99633 – Food, edible preparations, alcoholic and non-alcoholic beverages serving services and further under service code 996337 – Other Contract Food Services which are in nature of outdoor catering services and accordingly they would be taxable under Serial No. 7 Heading 9963 (v) at the rate of 18 per cent GST.
In respect to another question, it was held that supply by a domestic unit to the employee of SEZ unit can only be claimed to be zero-rated if it is authorised unit and the supply made by applicant to employees of SEZ unit is authorized operation.
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