The West Bengal Authority of Advance Ruling (AAR) has held that 5% GST is payable on Composite supply of catering services within the club premises along with renting of premises falls under ‘outdoor catering service’ together with ‘renting of premises.
The bench of Tanisha Dutta and Joyjit Banik has observed that tax is payable by the applicant 5% without ITC subject to the condition that the Room Tariff of the club does not exceed Rs. 7,500 per unit per day or equivalent. However, when the tariff is declared above Rs. 7,500/- per unit per day, the applicant shall be liable to pay 18% GST.
Table of Contents
Background
The applicant submitted that it is one of the premier and elite clubs of Kolkata and is primarily engaged in providing inter alia Club or Association Services, Short Term Accommodation, Restaurant, Catering services etc.
The applicant has its own premises and is engaged in the business of providing “composite supply of catering service along with the renting of premises”. The applicant wants to know whether the lower rate of 5% GST leviable on the Composite supply of “outdoor catering together with renting of premises” by virtue of Notification no. 11/2017- Central Tax (Rate) dated 28.06.2017 (as amended) shall be applicable.
Issue Raised
The applicant sought the advance ruling on the issues
- Whether the composite supply of catering service within the club premise along with renting of premise can be construed as “Outdoor Catering service along with Renting of Premise”.
- Whether the composite supply of catering service within the club premise along with renting of premise shall be liable to 5% GST without ITC.
- Whether the composite supply of catering service within the club premise along with renting of premise shall be liable to 18% GST with ITC.
- Whether the club is mandatorily required to pay 5% GST without ITC or the club has the option to charge 18% GST with ITC considering the fact that the club being engaged in rendering Accommodation Service may increase the Room Tariff to Rs. 7,500 and above (i.e. specified premise) during the peak season.
- What would be the applicable rate of GST on the catering service along with renting of premises, if the Room Tariff of the Club is declared Rs. 7,500 and above (i.e. specified premise) during the peak season.
Submissions
The applicant submitted that it is one of the premier and elite clubs of Kolkata primarily engaged in providing Club or Association Services. In the course of business, the club also provides Short Term Accommodation, Restaurant, Catering services etc. The applicant provides a standalone service of renting premises to the members for carrying out functions, wedding, social gatherings, parties etc. as well as indoor catering services along with the renting of premises. For rendering such services, the applicant needs to provide a bundle of services including renting of premises, decorations, light, sound and indoor catering.
Conclusion
The bench observed that where the applicant provides renting of premises along with supply of food at any event, such supply would attract 5% GST with the restriction of input tax credit and subject to the condition that the Room Tariff of the club does not exceed Rs. 7,500/- per unit per day or equivalent. Clarification given in the CBIC Circular 27/01/2018-GST dated 04.01.2018 as referred by the applicant in para 2.10 supra is to be followed in order to determine whether the applicant is located in ‘specified premises‘ or the supply is provided at ‘specified premises‘.
The bench ruled that Composite supply of catering services within the club premises along with renting of premises falls under ―outdoor catering service together with renting of premises‖ arranged at premises other than ‘specified premises’.
It was further ruled that 5% GST is payable against whole consideration of the composite supply without ITC subject to condition.
What is a GST rate on Composite Supply Of Catering Services Within Rented Club Premises?
5% GST is payable on Composite supply of catering services within the club premises along with renting of premises falls under ‘outdoor catering service’ together with ‘renting of premises.
Whether the composite supply of catering service within the club premise along with renting of premise can be construed as “Outdoor Catering service along with Renting of Premise”?
5% GST is payable on Composite supply of catering services within the club premises along with renting of premises falls under ‘outdoor catering service’ together with ‘renting of premises.
Applicant’s Name: The Tollygunge Club Limited
Date: 10/09/2024
