CLASSIFICATION AND RATE ON SUPPLY OF FOOD AT EVENTS

[Dr. Sanjiv Agarwal]

The applicant, a club was providing its members privileges and amenities such as swimming facility, gymnasium, indoor games, restaurant services, etc. It sought advance ruling on determination of the classification and tax rate in respect of supply of food at events organized in the club premises.

Advance ruling was sought on classification and rate of following activities:

(a)     Supply of food from restaurant

(b)    Other services provided in restaurant like booking of personal dining area

(c)     Supply of food at events organised in the club premises like get-togethers and parties hosted by members of the Club

(d)    Supply of other services being part of organising the get-togethers and parties in the club premises like valet parking charge, decoration charge, music charge, etc.

(e)     Other services provided by the club

The AAR ruled that such services by the club to its members were liable to levy of GST @ 18%.Vide Order dated 28.03.2019. [ IN RE: M/S. THE BENGAL ROWING CLUB- 2019 (3) TMI 1474 - AUTHORITY FOR ADVANCE RULING, WEST BENGAL ] Following ruling were given :

(a)     The supply of food, by way or as part of any service or any other manner whatever, from the Appellant’s restaurant are classifiable under SAC 9963 and taxable under S. No. 7(i) or 7(iii) of the Notification No. 11/2017-C.T (Rate) dated 28-06-2017 under the Central Goods and Services Tax Act, 2017 & Notification No. 1135-FT dated 28-06-2017 under the West Bengal Goods and Services Tax Act, 2017 depending on the criteria mentioned therein.

(b)    If food is supplied by way of or as a part of the services associated with organisation of social events at the club premises, it will be classifiable under SAC 9963 and taxable under S. No. 7(vii) of the Rate Notification.

(c)     All other services offered by the Appellant are classifiable under SAC 9995 and taxable under S. No. 33 of the Rate Notification.

(d)    The provisions under sub-section 2 and sub-section 16 of section 17 of the GST Act read with Rules 42 and 43 of the GST Rules are applicable for reversal of input tax credit, treating supplies, if any, taxable under S. No. 7(i) of the Rate Notification as exempt supplies.

Being aggrieved, the applicant preferred an appeal before AAAR.

The AAAR observed that any supply of food or beverage at any event, whether or not served at an outdoor or an indoor function will be taxable at 18%. It is not restricted to exhibition or marriage halls only but shall include all functions which are occasional in nature irrespective of whether these are held outdoor or indoor. The qualifying criteria was that services must be event based and occasional in nature. The get-togethers and parties are social functions and are occasional in nature. Therefore, it was held that the supply of food by the club at the events cannot be treated as regular restaurant services.

It was held that supply of food at events organised by the Appellant in the club premises is taxable under S.No. 7(v) of the Notification No. 11/2017-C.T (Rate) dated 28-06-2017 under the Central Goods and Services Tax Act. 2017 & Notification No. 1135-FT dated 28-06-2017 under the West Bengal Goods and Services Tax Act, 2017 and taxed @ 18%.

It was therefore, ruled that supply of foods at events organized in club premises shall be taxable under GST and applicable rate of GST shall be 18 percent.

The appeal was therefore, dismissed and advance ruling affirmed. [In Re: Bengal Rowing Club  2019 (8) TMI 33 - APPELLATE AUTHORITY FOR ADVANCE RULING, WEST BENGAL ].