Goods and Services Tax (GST) is an indirect tax. It is imposed on the supply of goods and services across the country. It has brought uniformity in the indirect tax hierarchy by replacing all the indirect taxes that existed in the pre-GST regime.
GST on Banquet Hall and Catering Services
India, hotels, and large Banquet halls generally provide banquet hall services, including renting the hall and decoration. Also, they offer restaurant services such as catering, supplying the workforce, and arranging for the festivities. However, a Banquet hall or hotel can either choose to rent out the hall or render catering services.
Four relevant HSN classifications are applicable in the case of the services mentioned above.
- HSN 996331 includes services such as cafes, room services, home delivery of food, and other similar services.
- HSN 996334 includes catering services rendered in functions, marriages and exhibition halls, and other events.
- HSN 998553 includes reservation services for convention and congress centers
- HSN 997212 includes leasing or rental services associated with the leased or owned non-residential property.
GST on Banquet Hall Services
The contention point always has been whether one should consider banquet services under HSN 997212 or HSN 996334. HSN 997212 deals with leasing or renting industrial, non-residential, and commercial structures. Also, it is applicable only in cases where leasing services are involved. However, a banquet hall provides both leasing and catering services.
Therefore, one can safely assume that banquet services fall under HSN 996334, because of which the GST rate applicable to banquet services is 18%.
FAQs
Q1. Is there any difference between Banquet Services and Restaurant Services?
- Firstly, In the case of banquet services, the client receives the premises as well as auxiliary services like as décor, lighting, and music, in addition to the food and beverages (which are part of the restaurant service).
- Secondly, The rental of facilities and the provision of meals are accorded equal weight in the banquet hall service. There may be a situation where the hall is rented for an event, but there is no food available, for example, to conduct a seminar, but there can never be a situation where food is available without the rental of premises for any event.
Q2. GST on Banquet Services?
Banquet Services involve an elaborate meal than a regular family dinner due to the scope of the event or size of the crowd present. These services can be as varied as the marriage, meeting, conference etc.
In India, Banquet Services is quite popular and successful. Therefore, The government gains revenue by imposing GST on Banquet Services.
The Banquet Hall is subject to GST at the rate of 18%. It will be charged on its own. Furthermore, There is no concern with composite or mixed supply or other services in hotel or etc.
Q3. What are Catering Services?
Catering services help clients with food preparation, production, distribution, and display. If you’ve ever been to a wedding reception where the food was deliciously prepared and presented, the event was probably catering.
