‘Banquet’ means a splendid feast which is arranged to cater for a large number of people. Accordingly, ‘Banquet Service’ in today’s time means an elaborate meal (other than a regular family dinner) along with various other facilities due to the scope of an event or the size of the crowd.
From a GST perspective, ‘Banquet Service’ means a service provided for hosting events like weddings, parties, conferences, etc. along with the venue. Importantly, in the case of Banquet Service under GST, renting of the hall/ venue will be the main element.
The present article provides an analysis of Banquet Service from the GST perspective; the classification and taxability of Banquet Service and the difference between Banquet Service and Restaurant Service.
Banquet Services under GST
As we know, under GST, the taxable event is ‘Supply’ i.e. the activity needs to be classified as either ‘Supply of Goods’ or ‘Supply of Services’.
However, in the case of Banquet Service, it involves both ‘Supply of Goods’ in the form of ‘Supply of food’ and ‘Supply of Service’ in the form of ‘Supply of renting and other services’. Thus, conclusively, ‘Banquet Service’ can be categorized as a ‘composite supply’.Accordingly, the following can be concluded by referring to Entry 6(b) of Schedule II of the Central Goods and Services Tax Act, 2017
- Composite supply will be treated as ‘Supply of Service’ where there is composite supply, by way of/ as part of any service/ in any other manner, of goods being food.
Resultantly, ‘Banquet Service’ is a ‘Supply of Service’ from a GST perspective. Now, let us look into the classification and taxability of ‘Banquet Service’ in the paragraphs below.
Banquet Service classification and taxability
As seen above, ‘Banquet Service’ is ‘Supply of Service’. Accordingly, for applicability of classification as well as GST rate, notification no. 11/2017- Central Tax (Rate) dated 28th June 2017 needs to be referred.Notably, in the absence of any direct entry covering the ‘Banquet Services’, classification of it is a bit difficult task. So, the classification needs to be done on the basis of relevancy.
The most relevant entry vis-à-vis Banquet Service is entry no. 7(vii) of notification no. 11/2017- Central Tax (Rate) dated 28th June 2017. The same is highlighted hereunder
Heading 9963 – Accommodation, food and beverages service
Supply, by way of/ part of any service/ in any other manner, of goods (including but not limited to food or any other article for human consumption/ any drink), where such supply/ service is for cash, deferred payment or other valuable consideration, in a premise (including the convention center, club, hotel, pandal, shamiana, or any other place, specifically arranged for organizing a function) together with renting of such premises.
9% CGST + 9% SGST = Total GST 18%
Accordingly, as per the above entry, ‘Banquet Service’ is classifiable under the heading ‘9963’ and 18% GST is payable on the same.
Difference Between Banquet Service and Restaurant Service
Yes, there is difference between banquet service and restaurant service.
‘Banquet Service’ is provided by venues that specialize in hosting/ organizing events like party, conference, weddings, etc. In the case of Banquet Service, an equal amount of importance is given to both renting of the premises as well as supply of food. Banquet Service covers various services such as the supply of food, renting of premises, decoration, lightings, music, etc. Thus, ‘Banquet Service’ doesn’t involve a pure supply of food.
Coming to ‘Restaurant Service under GST’, such services are provided by establishment that primarily serves food and/or beverages to the customers. It involves a pure supply of food.
‘Banquet Service’ is a supply of service which is more relevantly classifiable under heading 9963. Accordingly, GST @ 18% (9% CGST + 9% SGST) is leviable on the same. Further, ‘Banquet Service’ cannot be equated and classified as ‘Restaurant Service’, as both service are quite different.
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