Gst On Railway Catering Services

Indian Railways being a body of Central Government is engaged in providing transportation services to the public in India. Indian railways supply food and beverages on a large scale for its millions of passengers. There are two types of catering services offered; mobile catering (supplying food for the passengers on board) and static catering services (stalls, food courts in the railway premises). In this article, we look at the applicability and GST rates for Railway Catering Services. The IRCTC (Indian Railway Catering and Tourism Corporation), which is a subsidiary of the Indian Railways handles the catering operations of the Indian railways. According to the catering policy that was launched last year, all food plazas, mobile pantry and base kitchens come under the control of IRCTC.

GST Impact on Railway Catering Services

GST is charged on the supply of goods and services. The supply of food and beverages being considered as the supply of goods is levied GST by Indian Railways. Post regime, the impact of GST railway catering was not severe but noticeable.

GST Rates

The government implemented GST in the slab rates of 0%, 5%, 12%, 18% and 28%. The Railways applies different GST for food served on trains and at stations. Passengers travelling by trains should pay GST for consuming food either at railway stations or on train excluding the service charges, as supplying food and beverages directly to passengers at fixed rate do not involve any element of services. Hence, GST shall be charged on individual items as per their respective applicable rates. While in special trains like Rajdhani and Shatabdi Express, ticket prices incorporate meals wherein the same vendor who has the license to serve food in trains and stations ends up charging different GST rates as levied by the Indian Railways. The GST chargeable on catering services in railways is as under:-

For static units not having the facility of air conditioning or central heating at any time during the year- 12% with full Input Tax Credit (ITC)
For static units having the facility of air conditioning or central heating at any time during the year - 18% with full Input Tax Credit (ITC)
For Rajdhani/Shatabdi/Duronto and other Mail/Express trains-18% with full Input Tax Credit (ITC)
GST on catering services of other premium trains like Tejas, Gatiman, Shivalik etc. is levied 18% tax.

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Revised GST Rate on Railway Catering Service

IRCTC levied 5% tax without Input Tax Credit (ITC) for the food supplied by the Indian Railways in trains or at platforms (static units). GST applicable to supply of food and drinks offered in trains, platforms or stations is often misinterpreted. To remove the uncertainty and doubt in this issue, uniformity in the rate was announced by The Ministry of Finance in April 2018.

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Frequently Asked Questions

Common questions about GST on Railway Catering Services in India.

Mobile catering refers to the supply of food and beverages to passengers on board the trains, while static catering services involve the stalls, food courts, and other outlets located at railway premises.

Yes, GST is charged on the supply of food and beverages by Indian Railways, as it is considered a supply of goods.

The GST rates for railway catering services are 12% for static units without air conditioning/central heating, 18% for static units with air conditioning/central heating, and 18% for catering services in Rajdhani, Shatabdi, Duronto, and other premium trains.

Yes, full Input Tax Credit is available for the GST paid on railway catering services, except in the case of the revised 5% GST rate announced in April 2018 for food supplied in trains or at platforms.

The revised GST rate announced in April 2018 for food supplied by Indian Railways in trains or at platforms (static units) is 5%, without Input Tax Credit.

Yes, the GST rate for catering services in premium trains like Tejas, Gatiman, and Shivalik is 18%.

The catering operations of Indian Railways are handled by the Indian Railway Catering and Tourism Corporation (IRCTC), which is a subsidiary of Indian Railways.

The supply of food and beverages by Indian Railways is considered a supply of goods for GST purposes, and hence, GST is charged on individual items as per their respective applicable rates.

No, the GST charged for food consumed on trains or at railway stations excludes service charges, as supplying food and beverages directly to passengers at a fixed rate does not involve any element of services.

Yes, there has been some confusion and misinterpretation regarding the GST rates applicable to the supply of food and drinks in trains, platforms, or stations, which led to the Ministry of Finance announcing a uniform rate in April 2018 to remove the uncertainty.