GST On Catering Business
GST On Catering Services Business
Meaning of Catering Business in common parlance : –
Catering is the business of providing food service at a remote site or a site such as a hotel, public house (pub), or other location. Catering has evolved to become an artisanal affair. Caterers provide food for parties, events and institutions. Caterer refers to one person who supply directly or indirectly any food or food related operation. The operation would generally comprise of hard drinks, soft drinks, crockery and other items required. An outdoor caterer too works on the same line but in this case the food and other accompaniments are either served in the same location but in an outdoor setting or at a different location altogether.
Applicability of GST Registration for Catering Business
Section 22 to 25 specifies the persons who are liable to obtain GST Registration.
Every person who is engaged in supply of goods or rendering of services or both will be liable to be registered under the GST if
- Aggregate Turnover in a financial year of taxable supply of goods or services exceeds Rs. 20 Lac or
Aggregate Turnover in a financial year of taxable supply of goods or services exceeds Rs. 10 Lac if person is located at North Eastern area ( Manipur , Arunachal Pradesh , Nagaland , Meghalaya , Assam , Tripura & Mizoram , Sikkim , Jammu & Kashmir , HimachalPradesh & Uttarakhand )
GST Rate on Catering Business
Full Input Tax Credit Allowed
Input tax is a tax imposed on the person when he receives supply of goods & services which are used for his business. Now in case of catering business utilization of Input tax credit for making GST payment is allowed for Supply of Food/drinks in outdoor catering.
Impact of GST on Cash flow
- Under time of supply provisions , advance received made taxable , GST payment arises on advance taken
- Interstate purchase become taxable at GST rather than current 2% CST Rates
- Full credit of Interstate purchases allowed provided Supply of Food/drinks in outdoor catering
GST Return filing for Catering Business
- GST registration holder would have to file GSTR-1 (details of outward supplies) on the 10th of each month.
- GSTR-2 (details of inward supplies) on the 15th of each month and GSTR-3 (monthly return) on the 20th of each month.
- Compounding taxpayers would be required to file GSTR-4 every quarter, on 18th of the month next to the quarter.
- Finally, annual GST return must be filed by all GST registered entities on/before the 31st of December.
When to GST become Payable for Catering business?
Earliest of following date shall be considered as time of supply.
- When invoice is issued
- When invoice is not issued in 30 days from date of supply of service
- Date of receipt of services in books of account of service recipient
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