Understand GST on catering services and GST on banquet hall with Vakilsearch. Learn applicable GST rates, tax implications, and compliance requirements easily.
The GST on catering services and the GST on banquet hall charges can affect your budget whether you’re planning a wedding, a corporate event, or a private gathering. Regardless of whether food is included in a catering service or not, GST rates, exemptions, and compliance requirements differ based on factors such as location, type of service, and food inclusion.
In this article, we provide a detailed breakdown of GST rates, applicability, compliance requirements, potential penalties, and key differences between banquet hall and catering GST rules to assist you in navigating taxation smoothly.
What is GST on Catering Services?
Catering services attract 18% GST. Businesses providing these services can claim Input Tax Credit (ITC) on GST paid, subject to conditions under GST law, helping reduce tax liability and improve compliance. The rate may differ based on the type of establishment and whether alcohol is served.
What is the GST Rate on Food Catering Services?
GST for catering services depends on the nature of the service and the type of establishment providing it. Rates vary based on the venue, contractual agreements, and whether the service is event-based or part of an accommodation package. Here’s a detailed summary of GST applicable to food, beverage, and accommodation services provided through catering.
| Type of Service | GST Rate | Input Tax Credit (ITC) |
| Food services at restaurants, including takeaway (both air-conditioned and non-A/C) | 5% | Not Available |
| Food and beverages served at cafeterias, canteens, or messes with a contractual agreement (e.g., offices, schools, industries) | 5% | Not Available |
| Restaurant services in a hotel with a room tariff under ₹7,500 | 5% | Not Available |
| Restaurant services in a hotel with a room tariff of ₹7,500 or more | 18% | Available |
| Meals or food services offered by Indian Railways, IRCTC, or their licensees (on trains or at platforms) | 5% | Not Available |
| Food services provided at venues arranged for functions with venue rental | 18% | Available |
| Food services at exhibitions, conferences, events, or occasional indoor/outdoor functions | 18% | Available |
| Other food, accommodation, and beverage services | 18% | Available |
What is the GST Rate on Outdoor Catering Services?
Outdoor catering refers to services where food and beverages are provided at locations other than the caterer’s own premises, typically during events like weddings, conferences, or parties. This involves serving food at venues chosen by the client, distinguishing it from regular restaurant dining.
GST Implications:
- GST Rate: Outdoor catering services are taxed at 18%, with providers eligible to claim ITC.
- Comparison with Restaurant Dining: While standalone restaurants are taxed at 5% without ITC, outdoor catering attracts a higher rate due to the personalized and event-specific nature of the service.
Factors Determining GST on Catering Services
Several factors influence the applicable GST rate on catering services:
Type of Food Served:
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- Non-Alcoholic Beverages and Food (Vegetarian/Non-Vegetarian): Standard GST rates as mentioned above apply.
- Alcoholic Beverages: The supply of alcoholic beverages is subject to state excise duties and VAT, not GST.
Service Location:
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- Indoor Services: Services provided within the caterer’s own premises or fixed establishments like restaurants.
- Outdoor Services: Services rendered at external venues selected by the client, attracting different GST implications.
Input Tax Credit (ITC) Eligibility:
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- Eligible Services: Services taxed at 18% GST, such as outdoor catering and restaurant services within hotels with room tariffs of ₹7,500 or more, allow providers to claim ITC.
- Ineligible Services: Services taxed at 5% GST, like standalone restaurants and canteen services under contractual agreements, do not permit ITC claims.
HSN Code for Catering Services
The Harmonized System of Nomenclature (HSN) is an international system for classifying goods and services. In the context of GST, HSN codes standardize the classification, aiding in systematic taxation.
| Description | HSN Code |
| Catering services at exhibition halls, events, marriage halls, and other indoor/outdoor functions | 996334 |
| Room or unit accommodation services provided by hotels, inns, guest houses, clubs, etc. | 996311 |
| Campsite services | 996312 |
| Recreational and vacation camp services | 996313 |
| Room or unit accommodation services for students in student residences | 996321 |
| Room or unit accommodation services provided by hostels, camps, paying guests, etc. | 996322 |
| Other room or unit accommodation services not classified elsewhere (n.e.c.) | 996329 |
| Services offered by restaurants, cafes, and similar eating facilities, including takeaway and room services | 996331 |
| Services offered by hotels, inns, guest houses, clubs, etc., including room services and food delivery | 996332 |
| Services provided in canteens and similar establishments | 996333 |
| Catering services in trains, flights, and similar modes of transport | 996335 |
| Preparation or supply of food, edible preparations, alcoholic and non-alcoholic beverages to airlines and transportation operators | 996336 |
| Other contract food services | 996337 |
| Other food, edible preparations, and beverage serving services not classified elsewhere (n.e.c.) | 996339 |
What is the GST on Banquet Halls?
Goods and Services Tax (GST) implications for banquet hall services in India is essential for both service providers and clients. Banquet halls are typically taxed at 18% under GST. The applicable GST rates vary depending on whether the banquet hall is rented with or without food services and the nature of the establishment.
GST Rates & ITC Rules for Banquet Hall Rentals With and Without Food Services
Understanding the applicable GST rates and input tax credit (ITC) eligibility for different types of banquet hall rental scenarios is crucial for compliance. Below is the GST rate structure and ITC eligibility for various banquet hall rental scenarios:
| Service Type | GST Rate | Input Tax Credit (ITC) Eligibility | HSN Code |
| Banquet Hall Rental Without Food | 18% | Available | 997212 |
| Banquet Hall Rental With Food | 18% | Available | 996334 |
| Standalone Banquet Hall with Food Services | 18% | Available | 996334 |
| Restaurant-Based Banquet Hall with Food | 5% | Not Available | 996331 |
HSN Codes for Banquet Hall Services
Harmonized System of Nomenclature (HSN) codes are used to classify goods and services under GST for systematic taxation. Relevant HSN codes for banquet hall services include:
- 997212: Leasing or rental services concerning non-residential property, applicable for banquet hall rentals without food services.
- 996334: Catering services provided within banquet halls, applicable when food services are included.
- 996331: Services provided by restaurants, cafes, and similar eating facilities, applicable for restaurant-based banquet halls providing food services.
Compliance, GST Registration & ITC Claims
In India, banquet halls and catering service providers must comply with Goods and Services Tax (GST) regulations. Input Tax Credit (ITC) claims are managed effectively by understanding GST registration requirements.
Who Needs GST Registration?
Businesses offering banquet hall and catering services must register for GST if their annual turnover exceeds ₹20 lakh (₹10 lakh for special category states). The registration process is:
- Determine Eligibility: Confirm that your business turnover surpasses the threshold requiring GST registration.
- Gather Required Documents:
- PAN Card: Permanent Account Number of the business.
- Proof of Business Address: Rental agreement, property tax receipt, or electricity bill.
- Bank Account Details: Copy of the bank statement or a cancelled cheque.
- Identity Proofs: Aadhaar card, passport, or voter ID of the owners or partners.
- Online Application:
- Visit the GST portal (www.gst.gov.in).
- Complete Form GST REG-01 with the necessary details.
- Verification: Submit the application along with the required documents for verification.
- GSTIN Issuance: Upon successful verification, you will receive the Goods and Services Tax Identification Number (GSTIN).
Input Tax Credit (ITC) Rules
ITC allows businesses to offset the GST paid on inputs against their GST liability on outputs. For banquet and catering services:
- Eligibility: ITC can be claimed on GST paid for goods and services used in the course of business, such as raw materials, equipment, and venue rentals.
- Conditions:
- Possession of a valid tax invoice.
- Receipt of goods or services.
- The supplier has paid the GST to the government.
- Timely filing of GST returns.
- Restrictions: Input tax credit is not available when catering services are taxed at 5% GST; it is claimable only when the applicable GST rate is 18%.
Penalties for Non-Compliance in GST on Catering & Banquet Hall Services
Failure to comply with GST regulations in the catering and banquet hall industry can result in significant financial penalties. The following is a list of common violations and their corresponding penalties:
| Non-Compliance Issue | Penalty Imposed |
| Delayed GST Return Filing | ₹50 per day (₹25 CGST + ₹25 SGST), with a maximum cap of ₹5,000. For NIL returns, the penalty is ₹20 per day (₹10 CGST + ₹10 SGST). |
| Incorrect GST Rate Application | 100% of the tax amount due or ₹10,000, whichever is higher. |
| Failure to Register for GST (if applicable) | 100% of the unpaid tax amount or ₹10,000, whichever is higher. |
| Non-Issuance of Invoices | ₹10,000 or the equivalent of the tax due, whichever is higher. |
| Assisting or Facilitating Tax Evasion | Fine of up to ₹25,000. |
To avoid these penalties, businesses must ensure timely GST registration, accurate tax rate application, and proper invoicing practices. Staying compliant not only prevents financial losses but also enhances the credibility of the business.
FAQs on GST on Catering Services and Banquet Hall
Catering services attract 18% GST, and businesses can claim Input Tax Credit (ITC) on GST paid. However, claiming ITC is subject to conditions outlined in GST law, making compliance essential for availing tax benefits on such services.
The GST rate on banquet hall rentals is 18%, classified under Renting of Immovable Property. If food is included, it is treated as a composite supply, with 5% GST (without ITC) for restaurant-based banquet halls and 18% GST (with ITC) for standalone banquet halls.
The HSN code for catering services is 9963. A 5% GST rate (without ITC) applies to catering services provided by restaurants, canteens, or messes under a contractual arrangement.
Venue rental without catering services attracts a GST of 18%, while a venue hired with catering services is taxed at 5%
No, GST is a uniform tax across India. The GST rate for catering services remains consistent nationwide, regardless of the state.
No, they are taxed differently. Banquet hall rentals without food are taxed at 18% GST. If food is included, the GST rate is 5% (without ITC) for restaurant-based banquet halls and 18% (with ITC) for standalone banquet halls. What is the GST rate on catering services?
What is the GST rate on banquet hall?
What is the HSN code and GST 5% for catering services?
What is the GST rate for renting a wedding venue with and without catering services?
Does the GST rate for catering services differ from state to state?
Is the GST rate on banquet hall with food and without food the same?
