New Delhi, Aug 2 (KNN) The circular levying 5 per cent Goods and Services Tax (GST) on the catering services provided by the Mess or canteen in educational institutions and on the catering services provided by Indian railways has been withdrawn by the Central Board of Indirect Taxes and Customs (CBIC).

Earlier, the Board had issued an order clarifying that 5% Uniform rate of GST is applicable to all railway catering services in trains or on stations.

In January, it was also clarified that the supply of food or drink provided by a mess or canteen is taxable at 5% without Input Tax Credit under the current Goods and Services Tax regime.

“The Circular No. 28/02/2018-GST, dated 08.01.2018 as amended vide Corrigendum dated 18.01.2018 was issued to clarify GST rate applicable on catering services, i.e., supply of food or drink in a mess or canteen in an educational institute. Also, Order No 02/2018- Central Tax dated 31.03.2018, was issued to clarify GST rate on supply of food and/or drinks by the Indian Railways or Indian Railways Catering and Tourism Corporation Ltd. Or their licensees, in trains or at platforms (static units),” CBIC said in a circular.

In the last meeting of the GST Council held on 21st July it was clarified on the tax rates applicable on these services and decided to rationalize entry relating to the composite supply of food and drinks in the restaurant, mess, canteen, eating joints and such supplies to institutions (educational, office, factory, hospital) on contractual basis at GST rate of 5%.

The Council made it clear that the scope of outdoor catering under 7(v) is restricted to supplies in case of outdoor/indoor functions that are event-based and occasional in nature. Accordingly, a notification in connection with the same had been issued by the board.

“Hence, Circular No. 28/02/2018-GST, dated 08.01.2018 as amended vide Corrigendum dated 18.01.2018 and Order No 02/2018-Central Tax dated 31.03.2018 is withdrawn w.e.f 27.07.2018. Difficulty if any, in the implementation of this Circular may be brought to the notice of the Board,” the CBIC said.

The circular said, “Difficulty if any, in the implementation of this Circular may be brought to the notice of the Board.” (KNN Bureau)