Important Keywords: Order No. 2/2018 – Central Tax, GST on train catering, Indian Railways GST, 5% GST catering services, GST compliance, Finodha GST experts, railway catering tax,
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Table of Contents
F.No. 354/03/2018-TRU
Ministry of Finance
Department of Revenue
(Central Board of Excise and Customs)
(Tax Research Unit)
New Delhi Dated: 31st March, 2018
Order No. 2/2018 – Central Tax: Incidence of GST on providing catering services in train-Regarding.
To
Sh. Sanjiv Garg,
Additional Member (Tourism & Catering),
Railway Board, Ministry of Railways,
Rail Bhawan, New Delhi –110001.
Sir,
Kind reference is invited to your letter No. 2012/TG.III/631/2 dated 01.02.2018 requesting therein to clarify the rate of GST applicable to the supply of food and drinks trains.
- Different GST rates are being applied for mobile and static catering in Indian Railways which is presently leading to a situation whereby the same licensee (selected by Indian Railways/IRCTC) supplying the same food would be subjected to different GST rates depending on whether it is mobile or static catering, as also which variant of mobile catering it is [pre-paid (without option), pre-paid (with option) or postpaid]. The rate difference is resulting in the same food being supplied at two different rates to the railway passengers, which is anomalous.
- The passenger is not aware of the GST rate applicable to the food ordered by him/her. This may also lead to unnecessary litigation and thus further strengthens the need for uniform application of tax rate in respect of food and drinks in/by Railways.
- 4.With a view to remove any doubt or uncertainty in the matter and bring uniformity in the rate of GST applicable for all kinds of supply of food and drinks made available in trains, platforms or stations, it is clarified with the approval of GST Implementation Committee, that the GST rate on supply of food and/or drinks by the Indian Railways or Indian Railways Catering and Tourism Corporation Ltd. or their licensees, whether in trains or at platforms (static units), will be 5% without ITC.
Yours sincerely,
(Parmod Kumar)
OSD (TRU II)
Telephone: 011-23092374
E-mail: parmodkumar.71@gov.in
Frequently Asked Questions (📚 FAQs on Order No. 2/2018 – Central Tax)
Q1: What is Order No. 2/2018 – Central Tax?
Answer:
Order No. 2/2018 – Central Tax clarifies that the GST rate for all catering services in trains, platforms, and railway stations is 5% without ITC, applicable to Indian Railways, IRCTC, or their licensees.
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Q2: Why was this order issued?
Answer:
Multiple GST rates for mobile and static catering services caused confusion. Passengers ended up paying different GST rates for the same food. This order removes anomalies by applying a uniform 5% GST rate without ITC.
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Q3: What is the GST rate on catering services in trains as per this order?
Answer:
The GST rate is 5% without Input Tax Credit (ITC), irrespective of whether food is served onboard (mobile catering) or on platforms/stations (static catering).
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Q4: Who is impacted by Order No. 2/2018 – Central Tax?
Answer:
✔️ Indian Railways and IRCTC
✔️ All catering licensees of Indian Railways
✔️ Vendors providing food services on trains and railway stations
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Q5: What was the issue before this order?
Answer:
The same licensee was charging different GST rates based on whether the catering was mobile or static, leading to passenger confusion and potential litigation.
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Q6: Does this order apply to prepaid and post-paid catering services?
Answer:
Yes. The uniform 5% GST rate applies to:
Prepaid (without option)
Prepaid (with option)
Post-paid catering services
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Q7: Can ITC be claimed on catering services provided under this order?
Answer:
❌ No. The 5% GST rate is applicable without the benefit of Input Tax Credit (ITC).
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Q8: What does this mean for passengers?
Answer:
Passengers will now pay a standard 5% GST rate for food and drinks across all train catering and station services, ensuring transparency and consistency.
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Q9: How does Finodha help businesses in the hospitality and service sectors?
Answer:
GST Registration
GST Return Filing
Company Registration
ITR Filing
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Q10: How to stay updated on GST rulings and notifications?
Answer:
Bookmark Finodha GST Compliance Hub
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✅ Conclusion:
Order No. 2/2018 – Central Tax standardizes GST rates for train and station catering services to 5% without ITC, ensuring uniformity and customer transparency.
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Download PDF: Order No. 2/2018 – Central Tax
More Information: https://taxinformation.cbic.gov.in/
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