Food On Board Indian Railways To Get Expensive

As per a tax reform, Goods and Services Tax (GST) will be levied on food and beverages made available in the trains. The tax reform that was implemented last year in July, had imposed 5 percent on canteen services then levied the 5 percent on the food delivery from the canteen and mess as well in November and now the same tax has been imposed on the Indian Railways.

GST On Railways’ Food

The Delhi Authority for Advance Rulings (AAR) said that train cannot be deemed as a restaurant and that the food suppliers will be affected by this ruling. According to a report by the Econmic Times, the AAR ruling for food supplied on trains came about in response to a certain Deepak & Co, a company that had come into an agreement for the supply of food and beverages to the Indian Railways.

“Incidental services provided with supply of goods being the dominant intention would be treated as supply of goods in GST. Hence supply on board a train would be treated at par with like goods in a retail shop from a GST rate perspective,” said MS Mani, a partner at the consultancy firm Deloitte India to the Economic Times.