{"id":9224,"date":"2020-05-23T11:04:22","date_gmt":"2020-05-23T05:34:22","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=9224"},"modified":"2024-12-17T16:52:44","modified_gmt":"2024-12-17T11:22:44","slug":"gst-on-food-services-and-food-items","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/gst-on-food-services-and-food-items\/","title":{"rendered":"GST on Food Services and Food Items: All that you need to Know"},"content":{"rendered":"\n<p class=\"has-drop-cap\">GST on food services came to the fore, and still, food businesses are unable to adjust themselves according to the current changes in the system to make room for the new compliance model. Earlier, there was service tax and VAT regime, and then, with the implementation of GST on food services, all the cascading effects of indirect taxes got abolished. However, the service charge implemented by restaurants is distinct from goods and service tax.<\/p>\n\n\n\n<p>In India,<strong> <\/strong><a href=\"https:\/\/corpbiz.io\/gst-registration\" title=\"GST Registration in India\"><strong>Goods and service tax<\/strong><\/a><strong> <\/strong>on food services depends on different types of factors covering but not confined to the exact location of the restaurant or food service provider and establishment type. Here, the GST can be 5%, 12% or 18%. The noteworthy thing is that alcoholic beverages still appeal to the state level tax i.e., VAT. Hence, restaurants serving food as well as alcoholic beverages will call attention to separate taxes with goods and service tax levied on non-alcoholic beverages and food. At the same time, VAT would get imposed on alcoholic drinks served. Not only on the food services, but GST on food is also applicable to those food items that an ordinary man purchases. The range of the rate it features is beginning from nil and up to 18 % GST. Through this article, we will help you in exploring the principal rates applicable to goods and service tax on food services along with food products.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/gst-on-food-services-and-food-items\/#GST_on_Food_Services_Rates_Applicable\" >GST on Food Services: Rates Applicable<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/gst-on-food-services-and-food-items\/#Applicability_of_GST_rates_on_Food_Items\" >Applicability of GST rates on Food Items<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/gst-on-food-services-and-food-items\/#Impact_of_GST_on_Food_Services\" >Impact of GST on Food Services<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/gst-on-food-services-and-food-items\/#Take_Away\" >Take Away<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"GST_on_Food_Services_Rates_Applicable\"><\/span>GST on Food Services: Rates Applicable<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong><em>Given below are the salient rates applicable to GST on food services-<\/em><\/strong><\/p>\n\n\n\n<ul>\n<li>Applicability\nof 18% goods and service tax to all outdoor catering services rendered.<\/li>\n\n\n\n<li>18%\ngoods and service tax on food services comprising food delivery services\nprovided by a food joint or restaurant positioned within premises of a guest\nhouse, club, etc.<\/li>\n\n\n\n<li>18%\ngoods and service tax applicable to restaurant services including room services\nand takeaway services provided by restaurants established inside a hotel\nfeaturing room tariffs more than Rs 7500.<\/li>\n\n\n\n<li>5%\nGST on food services rendered by A\/C as well as Non-A\/C restaurants.<\/li>\n\n\n\n<li>Applicability\nof 5% goods and service tax on restaurant services encompassing takeaway and\nroom services provided by restaurants established within the building of a\nhotel featuring room tariff below Rs 7500.<\/li>\n\n\n\n<li>5%\ngoods and service tax on meals or food services rendered by government-owned\nCPSEs i.e., IRCTC\/Indian Railways or their licenses in trains, stations, or\nplatforms.<\/li>\n\n\n\n<li>Applicability\nof 5% goods and service tax on any non-alcoholic drinks or food served at\nmess\/cafeteria\/canteen in office, college, industrial unit, school, hostel,\netc. on a contract basis.<\/li>\n<\/ul>\n\n\n\n<p><em><strong>*GST rates are subject to periodic modification.<\/strong><\/em><\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/impact-of-gst-on-loans-in-india\/\">What is the Impact of GST on Loans?<\/a><\/mark><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Applicability_of_GST_rates_on_Food_Items\"><\/span>Applicability of GST rates on Food Items<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong><em>Given below are the rates applicable to Goods and service tax on food items-<\/em><\/strong><\/p>\n\n\n\n<ul>\n<li>18%\ngoods and service tax on chocolate and other cocoa and chocolate products.<\/li>\n\n\n\n<li>18%\ngoods and services tax on food preparations like those foods prepared using\nmalt extract, flour, etc. enclosing cocoa below 40% of overall weight.<\/li>\n\n\n\n<li>Applicability\nof 5% goods and service tax on food such as powder\/meal of dried legumes.<\/li>\n\n\n\n<li>5%\nGST on turmeric (Not including fresh turmeric), curry leaves, thyme, bay\nleaves, ginger (not including fresh ginger), etc.<\/li>\n\n\n\n<li>5%\ngoods and service tax on birds\u2019 egg out of egg\/shell yolks either cooked or\nboiled by steaming.<\/li>\n\n\n\n<li>5%\ngoods and service tax applicable to container packed meat bearing the\nregistered brand name or trademark.<\/li>\n\n\n\n<li>5%\ngoods and service tax on vegetables that are dried leguminous stuffed in a\ncontainer bearing the registered name of the brand.<\/li>\n\n\n\n<li>NIL\ngoods and service tax on fresh or chilled meat out of the container.<\/li>\n\n\n\n<li>NIL\nGST on chilled as well as fresh vegetables including garlic, potatoes, onions,\netc.<\/li>\n\n\n\n<li>NIL\ngoods and service tax on preserved\/fresh\/cooked bird eggs in the shell.<\/li>\n\n\n\n<li>NIL\nGST on those vegetables that get preserved using different methods unfit for\ndirect consumption by humans.<\/li>\n\n\n\n<li>NIL\ngoods and service tax on pasteurized or unpasteurized unsweetened milk, cream,\netc.<\/li>\n\n\n\n<li>NIL\nGST on fresh apples, dried\/fresh coconut\/ fresh pears, fresh grapes, etc.<\/li>\n\n\n\n<li>NIL\ngoods and service tax on vegetables packed inside a container\n(boiled\/steamed\/uncooked).<\/li>\n\n\n\n<li>NIL\nGST on dried leguminous shelled vegetables that are non-container packed\nregardless if split\/ skinned or not.<\/li>\n\n\n\n<li>Applicability\nof 12% goods and service tax on nuts, fruits, vegetables, and different edible\nparts of the plant that got prepared or preserved by using acetic acid or\nvinegar.<\/li>\n\n\n\n<li>12%\ngoods and service tax on consumable parts of the plant, fruits, nuts, and\nvegetables preserved with the help of sugar.<\/li>\n<\/ul>\n\n\n\n<p><em><strong>*GST rates are subject to periodic modification.<\/strong><\/em><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Impact_of_GST_on_Food_Services\"><\/span>Impact of GST on Food Services<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul>\n<li>After GST implementation, those who are having their breakfast and dinner in the restaurants have witnessed a simplified taxation process in terms of the bill as goods and service tax came as a replacement for various taxes as well as cesses such as Krishi Kalyan cess, VAT, service tax and many more. After the implementation of GST on food services, customers have also marked the reduction in tax rates on restaurant bills. However, the reduction in the cost for customers in relation to eating out was recognized to be passable at best.<\/li>\n\n\n\n<li>The service charge applied by the restaurant will be payable by the customer along with goods and service tax on food since GST has not affected service charge at all. For owners of the restaurant, the ITC availability after the <strong>GST implementation<\/strong><sup><a href=\"https:\/\/en.wikipedia.org\/wiki\/Goods_and_Services_Tax_(India)\"><strong>[1]<\/strong><\/a><\/sup> was anticipated to enhance the accessibility of working capital for restaurants. Later, input tax credit benefits available for owners of the restaurants got reduced after the amendments. As per the current goods and service tax rules, those eateries or restaurants charging 18% GST would get the benefits of the input tax credit. On the other hand, those eateries\/restaurants charging 5% GST on food services won&#8217;t be able to reap the benefits of ITC.<\/li>\n\n\n\n<li>Goods and service tax exemption have been provided in the case of frozen and fresh products as well. Goods and service tax on food services or items never cross 18% margin, and no food items have joined the 28% tax bracket i.e., highest tax bracket. Consequently, there is no report on the substantial increase or decrease in price after the implementation of GST on food services and food items.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Take_Away\"><\/span>Take Away<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The implementation of GST on food services and food items has put an end to the cascading effects of various indirect taxes. This article talks about the GST rates applicable to different food services along with the applicability of the GST rate on food items. Moreover, customers are enjoying the reduction in bill amount after GST implementation.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/oidar-services-under-gst\/\">\nKnow all about OIDAR Services under GST<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>GST on food services came to the fore, and still, food businesses are unable to adjust themselves according to the current changes in the system to make room for the new compliance model. Earlier, there was service tax and VAT regime, and then, with the implementation of GST on food services, all the cascading effects [&hellip;]<\/p>\n","protected":false},"author":19,"featured_media":9229,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[16],"tags":[592],"acf":{"service_id":"68"},"authorName":"Margesh Rai","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2024\/03\/Margesh.png","authorDescription":"With 10+ years of creative writing experience and 500+ blogs and thought leadership articles to his credit, Margesh Rai has left a significant impact in the field of content marketing. A published author and poet, Margesh Rai has experience writing for 20+ segments, such as Legal, Fintech, SAAS, Dairy, Real Estate, Hospitality, Recruitment, Sustainability, etc.","postViews":7845,"readingTime":4,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/9224"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/19"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=9224"}],"version-history":[{"count":11,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/9224\/revisions"}],"predecessor-version":[{"id":67908,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/9224\/revisions\/67908"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/9229"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=9224"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=9224"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=9224"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}