Supply of food and beverages in trains- Supply of Goods or Services?

Supply of food and beverages in trains- Supply of Goods or Services?

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Supply of food and beverages in trains- Supply of

Goods or Services?

[Deepak & Co., In re. – [2018] (AAR – New Delhi)]

Facts of the Case:

  • In the given case, Deepak & Co was engaged in supply of food and beverages to the passengers in trains as per the menu and tariff approved by the indian railways.
  • Assessee was under the impression that, supply of any food or beverage should be taxable at 5% if they are consumed on or away from the premises.
  • Assessee filed an application for advance ruling and wants to know that whether such services falls under the bracket of 5% or 18%

 

Held:

On the basis of following points the judgement was given:

  • A train is a means of transport and hence services provided in the train cannot be called as a restaurant, eating joint, mess or canteen etc. and hence catering services provided on- board canot fall under the category of catering and hence rate of catering services would not be apply.
  • Also held that supply of food and beverages (cooked/ MRP/ packed) by the applicant to the passengers/ general public at the rates fixed by the Indian Railways/ IRCTC at food stalls at Railway platforms does not have any element of service and hence the same shall be considered as pure supply of goods and GST shall be charged on individual items at their respective applicable rates.
  • The mere heating/ cooling of beverages or similar other services are incidental and minimal required to supply of goods and such supply cannot be called composite supply
  • Hence accordingly, supply of goods, i.e., food, bottled water, etc., should be charged to GST on the value of individual items at the applicable and not at blanket rate of services.

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