GST Effect: Check Now the GST Impact on Trains Food and Drinks

Supply of sustenance and drinks in trains will confront goods and services tax as applicable on such things and not the concessional rate of 5% as determined by the regime through a round, Authority for Advance Rulings (AAR) said on Tuesday.

A train is a medium of transport and can't be termed restaurant, eating joint, canteen or mess, Delhi AAR said in a choice that would affect those providing food on trains. The decision comes even as the industry has spoken to the regime and the GST Council on differential rates on the same regime prompting issues and potential disputes later.

Outdoor food attracts 18% GST, while canteen services confront 5%. The demand on the supply of food or drinks by facilities, such as a canteen or mess diminished to 5% in November. Hence, in January supplies made to Indian Railways were likewise placed in the 5% bracket by a circular.

The circular from Central Board of Indirect Taxes and Customs, declaring lower GST rate for sustenance on trains, did not state whether such exchanges should be dealt with as a supply of products or regimes.

The AAR ruling came because of an application by Deepak & Co. that went into a concurrence with the Indian Railways for the supply of sustenance and drinks (bundled, cooked or at MRP) on mail and express prepares.

AAR has watched that supply of sustenance and refreshments specifically to travelers at a settled rate on stages did not have any component of regimes, and subsequently GST might be charged on singular things according to their separate pertinent rates, it said.

It likewise noticed that unimportant warming and cooling of refreshments or comparable regimes are coincidental and not qualified for any tax break.

Assessment specialists said this will give some clearness on sustenance served in trains.

Harpreet Singh, the partner at KPMG, said the standard set around the propel specialist may have a sweeping effect on composite supply game plans including serving of sustenance at different places, for example, booths, nourishment slows down, and sustenance trucks.

Anita Rastogi, the circuitous assessment partner at PwC, said there was a need to ensure there is no conflict. "Considering that there has been a huge number of elucidations issued by the CBEC and parallelly various propel decisions turning out in broad daylight area, it is related that there ought to be no conflict among the two to the extent understanding is concerned," she said.