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Supply of food at events organized in the club premises is taxable @ 18% GST

August 1, 2019[2019] 108 taxmann.com 4 (AAAR-WEST BENGAL)
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GST: Where applicant was engaged in providing its members privileges and amenities such as supply of food from restaurant, other services provided in restaurant like booking of personal dining area, supply of food at events organised in club premises likeget-togethers and parties hosted by members of club, etc., supply of food at events organised by appellant in club premises was taxable under serial no. 7(v) of Notification No. 11/2017-Central Tax (Rate) dated 28-06-2017 under Central Goods and Services Tax Act, 2017 & Notification No. 1135-FT dated 28-06-2017 under West Bengal Goods and Services Tax Act, 2017 and taxed at rate of 18 per cent

• The applicant stated to be a non-profit making company, was engaged in providing its members privileges and amenities such as swimming facility, gymnasium, indoor games, restaurant service, etc. The various services provided by assessee were supply of food from restaurant, other services provided in restaurant like booking of personal dining area, supply of food at events organised in the club premises likeget-togethers and parties hosted by members of the club, supply of other services being part of organising the get-togethers and parties in the club premises like valet parking charge, decoration charge, music charges. Etc., and other services provided by the club.

• The WBAAR observed that the appellant's services could be broadly classified into two categories, namely, supply of food, by way or as part of the services provided at its restaurant or at social events organised in the club premises and the other services to the members and the guests that are not bundled with the supply of food and were charged separately. The WBAAR further observed that the supply of food, by way or as part of any service or any other manner whatever, was a composite supply. It pronounced its advance ruling that the supply of food, by way or as part of any service or any other manner whatever, from the appellant's restaurant were classifiable under SAC 9963 and taxable under S1. No. 7(i) or7(iii) of the Notification no. 11/20l7-C.T (Rate)dated 28-06-2017 under the Central Goods and Services Tax Act, 2017 &Notification No. 1135-FTdated 28-06-2017 under the West Bengal Goods and Services Tax Act, 2017. If food was supplied by way of or as a part of the services associated with or ganisation of social events at the club premises, it would be classifiable under SAC 9963 and taxable under Sl. no. 7(vii) of the Rate Notification. All other services offered by the appellant were classifiable under SAC 9995 and taxable under Sl. no. 33 of the Rate Notification.

• The appellant had filed an instant appeal against the above advance ruling on grounds that food supplied for social gatherings could not be categorised as composite services and taxable at the rate of 18 percent. The club raised separate bills for food and beverages for social gatherings. Further, as per the rate notification all restaurant services were to be taxed at the rate of 5 percent with no input tax credit.

• Under the provisions of serial no. 7(v) of the Rate Notification it is seen that any supply of food or beverage at any event, whether or not served at an outdoor or an indoor function, squarely falls under the said category. A social get-together held at the club premises as explained by the appellant, is "an event or a function" of occasional nature. An "event" is a planned public or social occasion whereas, a "function" means an official ceremony or a formal social event, such as a party or a special meal, at which a lot of people are usually present. The provisions of serial no.7(v) of the Rate Notification is not restricted to exhibition halls or marriage halls and includes all indoor and outdoor functions. Unlike the provisions of serial no. 7(vii) of the Rate Notification there is no restrictive clause as to rental of the premises where the event is being held. Further the phrase, "outdoor/indoor functions that are event based and occasional in nature' includes all functions which are occasional by nature irrespective of whether these are held indoor or outdoor. The qualifying criteria are that firstly, it must be an event based function and secondly, it must be occasional in nature. The social get-togethers and parties are special social functions and definitely occasional in nature. The services provided by the club at these social get-togethers are not regular restaurant services as envisaged from the submissions made by the appellant. So, the food supplied at events which are occasional in nature like the social get-togethers arranged at the club premises will unambiguously fall under serial no. 7(v) of the rate notification.

• In view of above discussion it is held that supply of food at events organised by the appellant in the club premises is taxable under serial no. 7(v) of the Notification No. 11/2017-Central Tax (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 at the rate of 18 per cent. There is no other infirmity in the order of the WBAAR considering the written and oral submission of the appellant.

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