The Maharastra Appellate Authority of Advance Ruling in an appeal filed by Merit Hospitality Services Pvt. Ltd. held that food supply to employees in other offices located in the Special Economic Zones (SEZ) is not zero rated supply.
The issues before the Appellate Authority were that whether the activities undertaken by the appellant by way of supply of food or drinks or other articles for human consumption to the employees of the company located in the SEZ is covered under the ‘zero rated supply’ or otherwise.
The appellant submitted that supply made to an SEZ unit or a developer of SEZ are treated as ‘zero’ rated supplies and Section 16(3) of the IGST allows a registered person to make ‘zero’ rated supplies without payment of IGST.
To answer the above issues, it was pointed out that the appellant are registered as “Outdoor Caterers” and are engaged in providing the corporate catering services to their offices/ units as per the terms and conditions of the contracts entered with them. Also, that they are engaged in preparing the food in their own kitchen and then distributing the same to various companies.
The Authority constituting of members Smt. Sungita Sharma and Shri Rajiv Jalota after concluding that the food is being cooked at one place and being distributed to the various different locations of the companies with whom they have entered into contract held that this service of supplying food by the appellant to the employees of the Unit located in the SEZ is not a ‘Zero-Rated Supply’ and the services of the appellant are also not ‘restaurant services’ as claimed by the appellant.
Subscribe Taxscan Premium to view the Judgment
