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TMI Blog2019 (10) TMI 562X X X X Extracts X X X X X X X X Extracts X X X X ..... s decision to purchase the food items available for sale, the contract of supply is entered and the consideration is as shown in the menu card. Hence it is a contract of supply between the applicant and the employee. The transactions relating to cash and carry model are examined and found that since the supply is neither event based nor occasional nature, the same does not get covered under the entry 7(v). Whether the applicant is a restaurant or eating joint for the purposes of this entry is the moot question. Here it is seen that the applicant is preparing the food items at the place and is selling the goods to the purchasers. Hence this amounts to sale of food items for consumption either in the premises or away from the premises. There is no condition in the entry that the premises should be own. It only mentions that the premises must be place where the services are supplied - The supply of services is happening in the premises of CISCO and the goods are prepared in the same premises and the services are provided there itself. Hence it would qualify as an eating joint (including mess, canteen) wherein the service is supplied. Explanation 1 is only clarificatory in nature ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n space (cooking area), kitchen equipment and utilities such as electricity and water, gas bank area with pipeline, regulator connections etc. are made available to the applicant by the client at their premises (herein after referred to as on-site kitchen ). The applicant sources all raw materials/ inputs required for preparation of food on regular intervals and make its own arrangement for their transportation to the on-site kitchen area. 4. In the instant case, the Applicant has entered into an agreement with M/s. CBRE South Asia Pvt. Ltd (hereinafter referred as CBRE ), for providing catering support services at premises of M/s. Cisco Systems India Private Limited (hereinafter referred as Cisco). CBRE has been appointed by Cisco for engaging service provider/ s for provision of catering and other support services to Cisco. 5. As per the agreement, the Applicant provides catering support services to Cisco / its employees, from its kitchen located at Cisco premises. Here applicant providing three types of catering services to the CISCO employees. a. business catering model: The Applicant serves food to employees working on specific shifts (as identified by Cisco), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (a) (b) 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 is for cash, deferred payment or other valuable consideration. 7.3 The applicant submitted that above entry clearly postulates that supply of food by way of or as part of any service or even in any other manner whatsoever, shall be treated as supply of services. In view of this, services provided by the Applicant, either under the outdoor catering model, wherein food is prepared at the central kitchen of the Applicant and served at client location or under on-site kitchen model, wherein the Applicant undertakes preparation of food from the client s location, would be considered as supply of service . Accordingly, tax rate applicable would be required to be determined as per Notification 11/2017 - CT (Rates), as amended from time to time. Tax Rate applicable on food and beverage services are notified under Sl. No. 7 of the above Notification which is narrated as under. Description of Service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Further, the applicant submitted that the services provided at onsite kitchen under business catering model and corporate/ social events model as outdoor catering services . However, in case of services supplied under cash carry model , the applicant undertakes preparation as well as supply of food from the cafeteria at client s location. Therefore, applicability of Sl. No. 7(i) of the Notification 11/2017 - Central Tax (Rate) read with Notification 46/2017 - Central Tax (Rate) (i.e. services by way of supply of food by canteen), would have to be examined in this case. 7.6 The applicant submitted that the term canteen is neither defined under GST Law nor under Chapter V of Finance Act, 1994 (hereinafter referred as erstwhile Service Tax law ). Therefore, the word canteen would have to be understood in common parlance. As per Oxford Dictionary canteen means A restaurant provided by an organization such as a college, factory, or company for its students or staff . Further, as per Collins English Dictionary A canteen is a place in a factory, shop, or college where meals are served to the people who work or study there. 7.7 Further, the applicant submitted that und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... caterer engaged in providing services in connection with catering at a place other than his own but including a place provided by way of tenancy or otherwise by the person receiving such services. Section 65(105)(zzt) defines Outdoor Catering Service as any service provided to any person, by an outdoor caterer. 7.11 The applicant submitted that in terms of the above provisions of the erstwhile Finance Act, the following could be inferred: (a) The person providing outdoor catering services should be engaged in supply of food, edibles, beverages or crockery and similar articles or accoutrements. (b) Supply to be for any purpose or occasion. (c) The supply may be directly by the person himself or indirectly through another (d) A caterer would be an outdoor caterer if services in connection with catering were provided at a place other than his own. The inclusive part of the definition includes a place which may be provided to the caterer by the person receiving the service either by an agreement of tenancy or otherwise. 7.12 The applicant submitted that the applicant provides services in canteen premise belonging to Cisco, where food is prepared a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under different models emanate from the same contract, all of them have to be examined independently and taxability of such services should be determined based on the nature of each service and not the whole contract. In support of his contention, the applicant has placed reliance on the decision of the Hon ble CESTAT, Mumbai in the case of M/s. Greenwich Meridian Logistics India Pvt. Ltd v. Commissioner of Service Tax, Mumbai [2016 (43) STR 215 (Tri-Mumbai)] = 2016 (4) TMI 547 - CESTAT MUMBAI wherein it was held that - 7. Each source of income must be looked at independently. A service provider is not necessarily a specialist in rendering one service; the earnings of a service entity may accrue from one or more services - some of which may be taxable. Finance Act, 1994 does not envisage determination of taxability from accounting entries. The manner or mode of booking the profit in the accounts of a commercial organisation has no bearing on the application of section 65(105) to a taxable activity. The nomenclature in the accounts that appears to have weighed heavily with the original authority is not material to classification of the service when the taxable entry speci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loyed to manage the entire operations at such premises. In addition, the applicant maintains its own menu card offering variety of foods to the customers or the employees of CISCO and accordingly, the mode of consideration whether paid through the employees or employer will not be relevant to determine the classification of services. In view of the above, the applicant maintains that the arrangement by the applicant at the client s premises partakes the character of a canteen/ cafeteria . PERSONAL HEARING / PROCEEDINGS HELD ON 23/04/2018 8. Sri. Harish B, Advocate and duly authorised representative of the applicant appeared for personal hearing proceedings held on 23.04.2018, reiterated the facts narrated in their application and submitted written arguments inter alia stating as under: 8.1 The applicant submitted that recent amendment was made by CBIC by way of Notification No. 13/2018- Central Tax (Rate) dated 26th July 2018, making further amendment to Sl.No. 7 (i) and Sl. No. 7 (v) of the Notification No. 11/2017- Central Tax (Rate) dated 28th June 2017, read with Notification No. 46/2017-Central Tax (Rate) dated 14th November 2017. As per the Notification, explanati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on monthly basis. (b) Corporate/ Social Event catering model - wherein the applicant provides catering and allied banquet services at internal events held at the employer s place against a consideration received from the employer or the employee responsible for the event, as the case may be. Both these models are not a part of the question raised in the present application and hence not discussed. (c) Cash and Carry Model: Under this model, the food is served to employees over the counter and consideration towards the same is received from the respective employees or individuals who place the order, at the rates provided in the menu. Though the menu is decided in agreement with the employer, invoices are issued under the GSTIN of the applicant to individual employees. Only the cash and carry model is the issue under the application and hence this is examined. 9.4 Under the cash and carry model, it is seen that the materials offered to the employees on the menu card are displayed and there is no binding on the part of the employee to purchase the same. Though the menu is decided in consultation with the employer, it has no bearing on the contract betwe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce of an institution such as school, college, hospital, industrial unit, office, by such institution or any other person based on a contractual arrangement with such institution for such supply, provided that such supply is not event based or occasional. The careful perusal of this entry states that a supply of food or any other article of human consumption or drink to be covered under this entry should not be provided in a premises of a place where the declared tariff is more than ₹ 7500/- per day which is satisfied. But the issue is whether the applicant is a restaurant or eating joint including mess or canteen. The Explanation 1 states that the even the supply made by a person other than the institution based on a contractual arrangement with such institution for such supply is also included. Hence, it can be concluded that the supply of services by the applicant in the cash and carry model would be covered under entry 7 (i) of the Notification, if it satisfies the following two conditions: (a) That the supply of service made in the canteen belonging to an institution is based on the contractual arrangement with such institution, and (b) That the such supply ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot limit the operation of entry no. 7 (i) and hence the entry no. 7 (i) is again considered: (i) 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 . Whether the applicant is a restaurant or eating joint for the purposes of this entry is the moot question. Here it is seen that the applicant is preparing the food items at the place and is selling the goods to the purchasers. Hence this amounts to sale of food items for consumption either in the premises or away from the premises. There is no condition in the entry that the premises should be own. It only mentions that the premises must be place where the services are supplied. The supply of services is happening in the premises of CISCO and the goods are prepared in the same premises and the services are provided there itself. Hence it would qualify as an eating joint (including mess, canteen) wherein the service is supplied. Explanation 1 is only clarificator ..... X X X X Extracts X X X X X X X X Extracts X X X X
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