GST is applicable on dinner coupons issued to members
COUPONS (FOR COMMUNITY LUNCH/DINNER/PARTY) SUPPLY IS CONCERN:
Supply of Dinner Coupons by Society/Association
- When a NGO/ / Society / Club / Association collects money from its members and provides them dinner coupons (for community lunch/dinner/party), it is considered a supply of service under GST. Even though the society is a “mutual body”, GST law specifically treats supply by clubs/associations to their members as taxable (due to amendment in Section 7 of the CGST Act with retrospective effect, upheld by Supreme Court in Calcutta Club case).
Yes, GST is chargeable if the NGO is registered under GST and the total annual turnover exceeds INR 20 lakh (INR 40 lakh in some states).
Rate of GST
- Coupons (For Community Lunch/Dinner/Party) are not standalone vouchers, but a mechanism to collect charges for catering/restaurant services.
- The underlying supply is food (coupons (for community lunch/dinner/party) ) catering service : taxable under Heading 9963 (Restaurant/Catering Services).
- COUPONS is applicable GST rate:
- 5% (without ITC) – if supply is made under restaurant/catering category (most common).
- 18% (with ITC) – in certain banquet/hall rental + catering packages.
So, normally 5% GST without ITC applies on dinner/lunch coupons distributed by society.
HSN / SAC Code : As far as HSN code is concern, correct Service Accounting Code (SAC) must be used. For catering/food supply:
-
- 996333 – Catering services in function halls
- 996337 – Other contract food services
- 9963 (general category)
If earlier you used a “General membership fee HSN” (9995 – services of membership organizations), you should change to 9963 for dinner/food-related coupons, since it is a different nature of supply.
Conclusion:
GST is applicable on dinner coupons issued to members, generally 5% (without ITC) under SAC 9963 (Catering/Restaurant services). & HSN/SAC must be changed from the normal membership code (9995) to the catering/restaurant code (9963) when raising invoices for such coupons.
However, in case we are willing to take GST Input on purchase made by Association, that 18% (with ITC) – in certain banquet/hall rental + catering packages. And HSN Code will be at taxable under Heading 9963 (Restaurant/Catering Services).
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