GST on Banquet and Catering Services

If you’re organizing a wedding, a party, or even a business event, banquet halls and catering services are likely part of your plans. But did you know these services come with an added GST (Goods and Services Tax)? Understanding how GST impacts the cost of hiring these services can help you plan your budget more effectively. Let’s break it down in simple terms.

How Does GST Apply to Banquet and Catering Services?

GST is a tax applied to most goods and services in India, and that includes banquet hall rentals and catering services. Right now, the GST rate for these services is set at 18%. This means that when you rent a venue or book catering, you’ll be paying an additional 18% in taxes on the total amount.

This 18% GST is split like this:

• 9% goes to the Central Government (CGST)
• 9% goes to the State Government (SGST), or if the services are from a different state, you pay 18% as IGST.

Which Services Are Affected?

• Banquet Hall Rentals: When you rent a banquet hall, 18% GST applies to the total amount. For example, if the hall costs ₹1,00,000, the GST will be ₹18,000.
• Catering: This tax also applies to catering, whether it’s provided by the venue or an outside caterer. This covers everything from food prep to serving.
• Other Services: Any additional services provided by the banquet hall, such as decorations or entertainment, also attract the same 18% GST.

Who Is Responsible for Paying GST?

You, the customer, pay GST on banquet and catering services. The service provider will include it in your final bill, and they’ll forward it to the government.

Can You Get a Refund on GST?

If you’re organizing an event for business purposes, and your business is registered under GST, you may be eligible for Input Tax Credit (ITC). This means you can offset the GST you’ve paid for the event against the tax you owe on your business sales.

However, if the event is personal—like a wedding or birthday—you won’t be able to claim ITC. ITC is only available for business-related expenses.

How Does GST Affect Costs?

Adding 18% GST can increase the total cost of your event significantly. For instance:

• A banquet hall that charges ₹2,00,000 will now cost ₹2,36,000 with GST.
• A catering service priced at ₹1,50,000 will rise to ₹1,77,000 with GST.

It’s important to keep this in mind when setting your budget.

Are There Any Exemptions?

At present, there are no specific exemptions or lower GST rates for banquet and catering services. The standard 18% GST applies to all services in this sector.

Tips to Manage GST Costs

• Go for Package Deals: Many banquet halls offer packages that bundle catering, decorations, and other services. These deals can sometimes lower the overall cost.
• Choose a Smaller Venue: If your event doesn’t need a large space, picking a smaller, more affordable venue can help cut costs, including the GST.
• Claim ITC (If Applicable): For business events, be sure to claim Input Tax Credit to recover some of the GST you’ve paid.

Conclusion

GST on banquet and catering services is something you should keep in mind when organizing an event. At 18%, it can add a noticeable amount to your final bill, so understanding how GST works can help you better prepare for your event’s expenses. Plan ahead, consider package deals, and, if possible, take advantage of the tax credit available for business-related events.