Certain Activity or Transaction whether it is Supply of Goods or Services- Para 6 Schedule II Read with Section 7(1A) - GST Ready Reckoner - GST

Activity or Transaction - Schedule II whether it is Supply of Goods or Services Section 7(1A) , states that; Where certain activities or transactions constitute a supply in accordance with the provisions of section 7(1), they shall be treated either as supply of goods or supply of services as referred to in Schedule II . [Note:- Before amendment it was clause (d) of section 7(1)(d) ] Read along with the definition of Goods services, Schedule II provide clarification regarding Which is the goods or services for taxability of GST Certain activity or transaction defined in Schedule II whether it is Supply of Goods or Services - As per para 6 of Schedule II of CGST Act - Composite supply (a) Works Contract - Supply of service Works contract as defined in clause (119) of section 2 , Works Contract means a contract for building, construction fabrication, completion, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning of any immovable property wherein transfer of property in goods (whether as goods or in some other form) is involved in the execution of such contract. The Works contract in relation to movable property under the post-GST regime shall be evaluated under the concepts of 'mixed supplies' and 'composite supplies'. As per section 17(5)(c) of the CGST Act, 2017 , input tax credit shall not be available in respect of the works contract services when supplied for construction of an immovable property (other than plant and machinery) except where it is an input service for further supply of work contract services. (b). Composite Supply of foods and beverage - Supply of service Supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (other than alcoholic liquor for human consumption), where such supply or service for cash, deferred payment of other valuable consideration. Important Notifications Circulars 1. Rate of CGST tax on Accommodation, food and beverage services mentioned in the entry no. 7 Heading 9963 w.e.f. 01/10/2019 [ Refer Notification No. 20/2019-CT(Rate) dated 30.09.2019 ] Description of Service Rate (%) Condition (i) Supply of hotel accommodation having value of supply of a unit of accommodation less than or equal to 7,500/- Rupees per unit per day or equivalent. 6 - (ii) Supply of restaurant service other than at specified premises 2.5 Provided that credit of input tax charged on goods and services used in supplying the service has not been taken. [ In other words NO ITC available [Please refer to Explanation no. (iv)] (iii) Supply of goods, being food or any other article for human consumption or any drink, by the Indian Railways or Indian Railways Catering and Tourism Corporation Ltd. or their licensees, whether in trains or at platforms . 2.5 Provided that credit of input tax charged on goods and services used in supplying the service has not been taken [Please refer to Explanation no. (iv)] (iv) Supply of outdoor catering , at premises other than specified premises provided by any person other than- (a) suppliers providing hotel accommodation at specified premises , or (b) suppliers located in specified premises . 2.5 Provided that credit of input tax charged on goods and services used in supplying the service has not been taken [Please refer to Explanation (iv)] (v) Composite supply of outdoor catering together with renting of premises (including hotel, convention center, club, pandal, shamiana or any other place, specially arranged for organising a function) at premises other than specified premises provided by any person other than- (a) suppliers providing hotel accommodation at specified premises , or (b) suppliers located in specified premises . 2.5 Provided that credit of input tax charged on goods and services used in supplying the service has not been taken [Please refer to Explanation (iv)] (vi) Accommodation, food and beverage services other than (i) to (v) above Explanation: (a) For the removal of doubt, it is hereby clarified that, supplies covered by items (ii), (iii), (iv) and (v) in column (3) shall attract central tax prescribed against them in column (4) subject to conditions specified against them in column (5), which is a mandatory rate and shall not be levied at the rate as specified under this entry. (b) This entry covers supply of restaurant service at specified premises (c) This entry covers supply of hotel accommodation having value of supply of a unit of accommodation above 7,500/- Rupees per unit per day or equivalent. (d) This entry covers supply of outdoor catering , provided by suppliers providing hotel accommodation at specified premises , or suppliers located in specified premises . (e) This entry covers composite supply of outdoor catering together with renting of premises (including hotel, convention center, club, pandal, shamiana or any other place, specially arranged for organising a function) provided by suppliers providing hotel accommodation at specified premises , or suppliers located in specified premises . 9 - Definition of various terms used in the Entry no. 7 vide clause no. 4 of Notification No. 11/2017-CT Tax (Rate) , dated 28 th June, 2017 , as amended from time to time. (xxxii) Restaurant service means supply, by way of or as part of any service, of goods, being food or any other article for human consumption or any drink, provided by a restaurant, eating joint including mess, canteen, whether for consumption on or away from the premises where such food or any other article for human consumption or drink is supplied. (xxxiii) Outdoor catering means 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, Conferences, Marriage Halls and other outdoor or indoor functions that are event based and occasional in nature. (xxxiv) Hotel accommodation means supply, by way of accommodation in hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes including the supply of time share usage rights by way of accommodation. (xxxv) Declared tariff means charges for all amenities provided in the unit of accommodation (given on rent for stay) like furniture, air conditioner, refrigerators or any other amenities, but without excluding any discount offered on the published charges for such unit. (xxxvi) Specified premises means premises providing hotel accommodation services having declared tariff of any unit of accommodation above 7,500/- rupees per unit per day or equivalent. 2. Food supplied to patients [ Circular No. 32/06/2018-GST Dated 12th February 2018 ] S. No. Issue Clarification Is GST leviable in following case: (3) Food supplied to the patients: Health care services provided by the clinical establishments will include food supplied to the patients; but such food may be prepared by the canteens run by the hospitals or may be outsourced by the Hospitals from outdoor caterers. When outsourced, there should be no ambiguity that the suppliers shall charge tax as applicable and hospital will get no ITC. If hospitals have their own canteens and prepare their own food; then no ITC will be available on inputs including capital goods and in turn if they supply food to the doctors and their staff; such supplies, even when not charged, may be subjected to GST. (3) Food supplied to the in-patients as advised by the doctor/nutritionists is a part of composite supply of healthcare and not separately taxable. Other supplies of food by a hospital to patients (not admitted) or their attendants or visitors are taxable. 3. GST rate applicable on supply of food and beverage services by educational institution [ Circular No. 85/04/2019- GST Dated 1st January, 2019 ] Supply of all services by an educational institution t its students, faculty and staff is exempt under Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, Sl. No. 66. Such services include supply of food and beverages by an educational institution to its students, faculty and staff. As stated in explanation 3 (ii) to Notification No. 12/2017-CT (Rate) dated 28.06.2017 Chapter, Section, Heading, Group or Service Codes mentioned in column (2) of the table in Notification No. 12/2017-CT (Rate) dated 28.06.2017 are only indicative. A supply is eligible for exemption under an entry of the said notification where the description given in column (3) of the table leaves no room for any doubt. Accordingly, it is clarified that supply of food and beverages by an educational institution to its students, faculty and staff, where such supply is made by the educational institution itself, is exempt under Notification No. 12/2017-CT (Rate) dated 28.06.2017 , vide Sl. No. 66 w.e.f. 01-07-2017 itself. However, such supply of food and beverages by any person other than the educational institutions based on a contractual arrangement with such institution is leviable to GST@ 5%.