New GST on Catering Services: Overview
Catering services play an important role in weddings, events, offices, and institutions. If you’re a catering business owner or hiring a caterer, understanding the gst on catering services is essential to avoid confusion over billing and taxation. This blog breaks down GST rates, conditions, and compliance in simple terms.
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New GST Rate on Catering Services in India
The Government of India is updating GST rates effective after 22 Sep 2025. Below are the expected new GST rates for catering services (no compensation cess).
| Type of Catering Service | New GST Rate | Input Tax Credit (ITC) |
|---|---|---|
| Regular/standalone catering (not at specified premises) | 5% | No |
| Outdoor catering (not at specified premises) | 5% | No |
| Catering at specified premises (hotel with declared room tariff ≥ ₹7,500/unit/night) | 18% | Yes |
| Catering under government contracts | 5% or 18% | Depends on notification/scheme & whether at specified premises |
Are Catering Services Taxable Under GST?
Yes, catering is considered a supply of service under GST. Whether the catering is provided indoors, outdoors, at a venue, or through a mess or canteen, it is taxable.
The applicable catering services gst rate depends on:
- Where the service is provided
- Who is receiving the service
- Whether the input tax credit (ITC) is claimed
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Old GST Rate on Catering Services
| Type of Catering Service | GST Rate | Input Tax Credit (ITC) |
|---|---|---|
| Regular catering (with ITC) | 18% | Allowed |
| Outdoor catering (without ITC) | 5% | Not allowed |
| Catering under government contracts | 5% or 18% | Depends on conditions |
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GST on Outdoor Catering Services
gst on outdoor catering services is charged at 5% GST without input tax credit, unless the catering is provided by a registered restaurant with the facility to claim ITC.
Outdoor catering includes:
- Wedding events
- Corporate parties
- Religious or cultural events
- Off-site food arrangements
If the caterer does not claim ITC, they must charge 5% GST.
If they do claim ITC, they are required to charge 18% GST.
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Catering Services in Schools, Colleges, and Offices
- Educational institutions: Exempt when food is provided to students and staff as part of education
- Office canteens: Usually taxed at 5% without ITC
- Industrial mess facilities: Same as office canteens — 5% without ITC
So, institutional meal contracts are not completely exempt unless specified by GST notifications.
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Billing Example
If a caterer charges ₹1,00,000 for an outdoor event:
- At 5% GST: ₹5,000 GST → Total = ₹1,05,000
- At 18% GST (with ITC): ₹18,000 GST → Total = ₹1,18,000
Choosing the rate depends on the business model and the ability to claim Input Tax Credit.
Conclusion
Whether you’re hiring a caterer or running a catering business, knowing the catering services gst rate is crucial. For most casual or outdoor events, GST is 5% without ITC, but registered businesses claiming input credits must charge 18%.
Understanding when and how GST applies helps with better pricing and compliance.
I am a Chartered Accountant with 5 years of experience specializing in GST, income tax, and HSN code classification. I help businesses with GST compliance, tax planning, and financial advisory, ensuring they meet regulatory requirements while optimizing their tax strategies. I aim to simplify GST filings, income tax laws, and HSN code classifications, helping professionals and business owners stay informed and compliant.
Frequently Asked Questions (FAQs)
- What is the standard GST on catering services?Usually 5% without ITC or 18% with ITC, depending on the billing method.
- Is GST on outdoor catering services always 5%?Yes, if the service provider is not claiming ITC. If ITC is claimed, they must charge 18%.
- What is the GST rate on catering services for government contracts?It can be either 5% or 18%, based on whether ITC is claimed and the contract type.
- Is GST applicable for food served in school canteens?Food served as part of educational services is exempt. However, private food contractors may attract GST.
- Can a caterer claim ITC?Only if they charge 18% GST on their invoice.
