GST on Catering Services: Rates, SAC Code & Invoicing Guide for Indian Caterers (2026)

Under Notification No. 20/2019-Central Tax (Rate) (effective 1st October 2019), the GST Council amended entry 7 of Notification No. 11/2017-CT(R). It specifically reduced the rate for outdoor catering from 18% with ITC down to 5% GST without ITC (2.5% CGST + 2.5% SGST for intra-state supplies, or 5% IGST for inter-state supplies).

When an independent caterer prepares, delivers, and serves food at a private residence, wedding lawn, farmhouse, community hall, or commercial office, the supply is classified under SAC 996334 and must mandatorily be billed at 5% GST with zero ITC.

Caterers cannot arbitrarily choose to pay 18% in order to reclaim input tax on equipment. Unless operating within 'specified premises', charging 18% violates Notification 20/2019 and will result in scrutiny notices, disallowance of customer ITC, and audit penalties under Section 73/74.

Under Explanation (iii) of Notification No. 20/2019-CT(Rate), 'specified premises' means premises providing hotel accommodation services having a declared tariff (or value of supply) of any unit of accommodation above ₹7,500 per unit per day or equivalent.

If a 5-star hotel or luxury resort with room tariffs exceeding ₹7,500 hosts a banquet or provides outdoor catering, the supply is taxable at 18% (9% CGST + 9% SGST or 18% IGST) with full 100% ITC on kitchen inputs, decor, and maintenance.

When an independent caterer provides catering at a venue located within specified premises, the service falls into the 18% tax bracket with ITC eligibility. However, once that same caterer serves at an independent farmhouse or private lawn, the rate drops back to the mandatory 5% without ITC.

Because input GST cannot be reclaimed against output liability, all GST paid on capital equipment and commercial inputs becomes a direct operational cost. Caterers must build these input taxes into their per-plate pricing strategy.

Corporate clients hiring caterers for corporate parties, employee lunches, or social events generally cannot claim ITC on food and beverages under Section 17(5)(b)(i), unless an outward taxable supply of the same category is made or provision of food is statutorily mandated under the Factories Act, 1948 (for factories with over 250 workers).

When a banquet hall, party plot, or marriage lawn supplies venue rental bundled together with catering services (food and beverages), it forms a composite supply under Section 2(30) of the CGST Act. Notification No. 20/2019-CT(R) brought composite supply of outdoor catering together with renting of premises (convention halls, clubs, shamianas) at non-specified venues under the mandatory 5% GST rate without ITC.

If an event space leases only the bare hall or lawn without any food, beverages, or kitchen services, the transaction is pure renting of immovable property under SAC 997212. It attracts 18% GST (9% CGST + 9% SGST) and allows the venue owner to claim full Input Tax Credit on facility maintenance, civil construction materials, and furniture CapEx.

Attempting to artificially bifurcate an integrated wedding package into 18% hall rent and 5% food to bypass tax rules will be recharacterized as a composite supply during GST departmental audits under Section 8.

Freshly prepared hot meals, buffet items, and cooked food transported to an event venue are exempt from E-Way bill generation under Rule 138(14) of the CGST Rules, 2017.

Transporting commercial tandoors, chafing dishes, gas burners, bone china crockery, and portable chillers requires a formal Delivery Challan under Rule 55.

Venura Catering OS automatically generates Rule 55 compliant Delivery Challans on mobile, ensuring transport vehicles pass state GST border checks without delay.