MUMBAI: The Delhi Appellate Authority for Advance Rulings (AAAR) has held that goods and services tax (GST) at a uniform rate of 5% will apply on food served in trains or on railway platforms. Putting an end to an ongoing controversy, it said this rate would be applicable irrespective of whether the food is served by a railways-licensed caterer or not.
The AAAR bench also added that the supply of newspapers in trains would be exempt from GST.
Earlier, the Authority for Advance Rulings (AAR) had held that GST shall be charged on individual items at their applicable rates. Further, there could have been different GST rates applicable based on whether the service was in trains or on platforms.
The challenges that this ruling threw up prompted Deepak & Co (the appellant) to file an appeal. This entity had entered into agreements with the Indian Railways for supply of food to passengers on Rajdhani trains as well as Mail and Express trains. Additionally, it supplied food through food plazas at railway stations.
It brought to the attention of the AAAR bench a clarification made by the Central Board of Indirect Taxes and Customs (CBIC) on March 31, 2018 at the behest of the railways ministry.
The AAAR also noted a subsequent notification dated July 26, 2018, which provided that supply of food/drink items by the Indian Railways, the Indian Railways Catering and Tourism Corporation (IRCTC) or their licensees — whether in trains or on platforms — would be subject to GST at 5% without input tax credit.