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West Bengal GST AAR: Catering Services for In-Patients Not Eligible for Tax Exemption

West Bengal GST AAR's Order in the Case of Bamapada Jana

The West Bengal Authority for Advance Ruling (AAR) in a judgment mentioned that the standalone supply of food to in-patients by a catering contractor is not entitled to exemption under the Goods and Services Tax (GST).

The matter comprises Bamapada Jana, a service provider contracted by the Central Hospital, South Eastern Railway, to supply meals to in-patients.

It was carried by the petitioner that their services were part of the composite healthcare services furnished via the hospital and hence must entitled to the exemption under Notification No. 12/2017-Central Tax (Rate). The same notification waives the healthcare services furnished via the clinical establishments, authorized medical practitioners, or paramedics.

AAR does not consider noting that the supply of food via the applicant was a standalone service, outsourced by the hospital, and not directly connected to the provision of healthcare services.

The composite healthcare services of the hospital comprises of the food supplied before the in-patients as suggested via the doctors or nutritionists, though the same exemption is applicable merely when the food is given via the hospital, either through its own kitchen or by in-house staff.

The AAR Bench of Dr. Tanisha Dutta and Joyjit Banik in a detailed analysis marked that the role of the petitioner was restricted to preparing and delivering food based on the instructions of the dietary given via the hospital. The activity does not entitle to “healthcare services” as described in the GST Act.

Also, the ruling laid reference to Circular No. 32/06/2018-GST, which cited that when the hospitals outsource food supplies to external contractors, then on such supplies GST is applicable, and the hospital cannot claim the ITC.

The same case has been differentiated by AAR from other rulings like those engaging multi-speciality hospitals, where the food supply was considered ancillary to healthcare services. The applicant in this case governs as a caterer and is not involved in furnishing any healthcare services.

The West Bengal AAR clarified that the applicant should impose GST on the invoices raised for the hospital and cited that these supplies count outside the extent of the composite healthcare services.

Case TitleBamapada Jana
GSTIN19AFGPJ5685M1ZP
Case NumberWBAAR 16 of 2024
Date26.11.2024
ApplicantSmt Swati Mukherjee
West Bengal GST AARRead Order

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Published by Arpit Kulshrestha
Arpit Kulshrestha seeks higher interests in financial services, taxation, GST, I-T, etc. Writes articles with depth knowledge and is extensive for the same. The resources provide effective articles for the products of SAG infotech which provides taxation and IT software. Writing from observations and researching makes his articles virtuous. View more posts
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