Catering services attract 18% GST. Businesses providing these services can claim Input Tax Credit (ITC) on GST paid, subject to conditions under GST law, helping reduce tax liability and improve compliance. The rate may differ based on the type of establishment and whether alcohol is served.The GST on catering services and the GST on banquet hall charges can affect your budget whether you’re planning a wedding, a corporate event, or a private gathering. Regardless of whether food is included in a catering service or not, GST rates, exemptions, and compliance requirements differ based on factors such as location, type of service, and food inclusion.
What is GST on Catering Services?
GST on catering services refers to the Goods and Services Tax applied to services related to providing food and beverages during events, functions, or gatherings. As per the GST framework in India, catering services typically fall under the 18% tax slab. This includes indoor and outdoor catering services offered by hotels, restaurants, or independent providers. However, the GST rate may vary based on factors such as the type of establishment and whether the service includes alcohol. Additionally, input tax credit (ITC) may be available for businesses availing catering services for official purposes, subject to specific conditions under the GST rule.
HSN Code for Catering Services
Description | HSN Code |
Catering services in exhibition halls, events, marriage halls, and other indoor/outdoor functions. | 996334 |
Room or unit accommodation services provided by hotels, inns, guest houses, clubs, etc. | 996311 |
Campsite services. | 996312 |
Recreational and vacation camp services. | 996313 |
Room or unit accommodation services for students in student residences. | 996321 |
Room or unit accommodation services provided by hostels, camps, paying guests, etc. | 996322 |
Other room or unit accommodation services not elsewhere classified (n.e.c.). | 996329 |
Services provided by restaurants, cafes, and similar eating facilities, including takeaway and room services. | 996331 |
Services provided by hotels, inns, guest houses, clubs, etc., including room services and food delivery. | 996332 |
Services are provided in canteens and other similar establishments. | 996333 |
Catering services in trains, flights, etc. | 996335 |
Preparation or supply of food, edible preparations, alcoholic and non-alcoholic beverages to airlines and transportation operators. | 996336 |
Other contract food services. | 996337 |
Other food, edible preparations, alcoholic and non-alcoholic beverage serving services not elsewhere classified (n.e.c.). | 996339 |
GST rate on Food Catering Services
GST for catering services is determined based on the nature of the service and the type of establishment providing it. The rates vary depending on the venue, contractual arrangements, and whether the service is event-based or part of an accommodation package. Below is a detailed table summarising GST on food catering services applicable to food, beverage, and accommodation services:
Type of Service | GST Rate | Input Tax Credit (ITC) |
Food services provided by restaurants, including takeaway (both air-conditioned and non-a/c) | 5% | Not Available |
Food or drink served at cafeterias, canteens, or messes operating under a contractual agreement (e.g., offices, industries, schools, colleges) | 5% | Not Available |
Restaurant services within a hotel with a room tariff less than ₹7,500 | 5% | Not Available |
Restaurant services within a hotel with a room tariff of ₹7,500 or more | 18% | Available |
Meals or food services provided by Indian Railways, IRCTC, or their licensees (in trains or at platforms) | 5% | Not Available |
Food services provided on premises arranged for functions along with venue rental | 18% | Available |
Food services at exhibitions, events, conferences, or occasional indoor/outdoor functions | 18% | Available |
Other accommodation, food, and beverage services | 18% | Available |
GST Rate on Outdoor Catering Services
Outdoor catering refers to services where food and beverages are provided at locations other than the caterer’s own premises, typically during events like weddings, conferences, or parties. This involves serving food at venues chosen by the client, distinguishing it from regular restaurant dining.
GST Implications:
- GST Rate: Outdoor catering services are taxed at 18%, with providers eligible to claim ITC.
- Comparison with Restaurant Dining: While standalone restaurants are taxed at 5% without ITC, outdoor catering attracts a higher rate due to the personalized and event-specific nature of the service.
Factors Determining GST on Catering Services
Several factors influence the applicable GST rate on catering services:
Type of Food Served:
- Non-Alcoholic Beverages and Food (Vegetarian/Non-Vegetarian): Standard GST rates as mentioned above apply.
- Alcoholic Beverages: The supply of alcoholic beverages is subject to state excise duties and VAT, not GST.
Service Location:
- Indoor Services: Services provided within the caterer’s own premises or fixed establishments like restaurants.
- Outdoor Services: Services rendered at external venues selected by the client, attracting different GST implications.
Input Tax Credit (ITC) Eligibility:
- Eligible Services: Services taxed at 18% GST, such as outdoor catering and restaurant services within hotels with room tariffs of ₹7,500 or more, allow providers to claim ITC.
- Ineligible Services: Services taxed at 5% GST, like standalone restaurants and canteen services under contractual agreements, do not permit ITC claims.
FAQs
Q1. Does the GST rate for catering services differ from state to state?
No, GST is a uniform tax across India. The GST rate for catering services remains consistent nationwide, regardless of the state.
Q2. What is the GST rate for renting a wedding venue with and without catering services?
Venue rental without catering services attracts a GST of 18%, while a venue hired with catering services is taxed at 5%
Q3. What is the HSN code and GST 5% for catering services?
The HSN code for catering services is 9963. A 5% GST rate (without ITC) applies to catering services provided by restaurants, canteens, or messes under a contractual arrangement.
Q4. Is the GST rate on banquet hall with food and without food the same?
No, they are taxed differently. Banquet hall rentals without food are taxed at 18% GST. If food is included, the GST rate is 5% (without ITC) for restaurant-based banquet halls and 18% (with ITC) for standalone banquet halls.
Q5. Are Input Tax Credits (ITC) available on Catering Services?
Yes, businesses can claim Input Tax Credit (ITC) on paid GST on food catering services, subject to certain conditions specified under GST law.
Q6. What is the Catering Services GST rate in India?
Catering services GST rate are typically taxed at 18%, though the rate may differ based on factors like the type of service, establishment, and whether alcohol is included.
Q7. Will there be any changes in GST rates for restaurant services in hotels?
Yes, the 55th GST Council Meeting introduced changes that will apply from April 1, 2025, where the GST rate for restaurant services will depend on the accommodation value in the hotel.
Q8. What is the applicable GST rate and HSN code if I provide catering services based on contractual agreements?
Catering services based on contractual agreements, not falling under ‘Outdoor Catering,’ are classified under ‘Other Contract Food Services’ with HSN code 996337. These services attract an 18% GST rate (9% CGST and 9% SGST).
Q9. What is the GST rate for restaurant services within hotels?
The GST rate for restaurant services within a hotel depends on the room tariff. If the tariff is less than ₹7,500, the GST rate is 5%. If it is ₹7,500 or more, the rate increases to 18%, with ITC available.
Q10. Can hotels choose their GST rate for restaurant services?
Yes, hotels can choose to pay 18% GST with ITC for restaurant services by submitting a declaration before the start of the financial year.
