GST on Railway Platform Food Sales: UP_AAAR_09/2019 Explained
The Appellate Authority for Advance Ruling ruled that food sales at railway platforms are services taxed at 5% without input tax credit.
- Ruling
- Order No. 09/AAAR/01/11/2019 dated 01.11.2019
- Authority
- Appellate Authority for Advance Ruling
This page was written by Patron Accounting’s AI from the official release and reviewed before publishing. It explains the document in plain language. It is not the document itself. Where this page and the original differ, the original governs.
The short version
- Food sales at railway platforms are classified as a supply of services.
- These services are taxed at 5% GST.
- Businesses cannot claim input tax credit on license fees paid to railways.
In short
The company asked if selling food at railway platforms counts as a sale of goods or a service. They wanted to know if they could pay 18% tax to claim input tax credit or pay 5% without it.
What has changed
How it worked before
Some businesses argued that selling pre-packed food without seating or table service should be treated as a simple sale of goods, allowing them to claim input tax credit.
What has changed
The authority ruled that under current GST notifications, these activities are officially classified as catering services. This means you must pay 5% GST and cannot claim input tax credit on your business expenses, such as license fees paid to the railways.
Who this affects
Businesses operating food stalls or General Minor Units at railway platforms.
An example
A snack stall owner at a railway station in another state wonders if they can claim input tax credit on their electricity and license bills. Based on this ruling, they should expect that their activity is likely classified as a service. They should not assume they can claim input tax credit just because they do not provide table service.
What you should do
Review your license agreement with the Indian Railways to see how your activity is defined. Remember that an advance ruling only binds the business that asked for it; your local tax officer may have a different view, so consult a professional before changing your tax filing.
If you do nothing
If you claim input tax credit when you are not entitled to it, the tax department may issue a notice to recover the amount. You could face penalties and interest charges for incorrect tax filings. Relying on a ruling that does not apply to your specific case is a significant financial risk.
The terms explained
- Input Tax Credit
- The tax a business pays on its own purchases that it can use to reduce the tax it owes on its sales.
- Advance Ruling
- A formal decision from tax authorities on how GST applies to a specific business situation.
- General Minor Units
- Small stalls or kiosks located on railway platforms that are licensed to sell food and drinks.
The ruling in detail
Appellate Authority for Advance Ruling
M/s. Amar Food Products
Order No. 09/AAAR/01/11/2019 dated 01.11.2019 · Uttar Pradesh
Questions before the authority
- Whether supply of food items at GMUs (General Minor Units) at Railway Platforms which include only counter sale of packed food items, drinks and cooked item shall be treated as 'Sale of Goods' or 'Sale of Services'?
- If it is sale of services, whether the whole revenue shall be taxed @ 5% without ITC under serial no. 7(ia) of notification no. 11/2017-CT (Rate) dated 28.06.2017 or assessee can opt to pay tax @ 18% with ITC under serial no. 7(ix) of that notification.
- If the assessee pays the taxes @ 5% under serial no. 7(ia), whether assessee can claim the Input Tax Credit (ITC) of GST paid on license fees to Indian Railway or IRCTC.
- If answer to question (iii) is negative. What will be the consequences for wrong availing of ITC?
Facts
The appellant operates General Minor Units (GMU) at railway platforms, selling packed food, drinks, and cooked items. They contended that their activity constitutes a supply of goods rather than a supply of services, as there is no provision for table service, seating, or other amenities. The appellant sought an advance ruling to determine the classification of their supply and the applicable tax treatment under GST.
Ruling
| Question | What the authority ruled |
|---|---|
| Classification of supply | Supply of services Classified under entry 7(ia) of Notification No. 11/2017-Central Tax (Rate) |
| Tax rate and ITC | Taxed at 5% without ITC As per serial no. 7(ia) of Notification No. 11/2017-Central Tax (Rate) |
| Eligibility for ITC on license fees | Cannot claim ITC ITC of GST paid on license fees to Indian Railway or IRCTC is not admissible |
| Consequences of wrong ITC | Question out of purview The authority stated this question is out of the mandate of Advance Ruling under Section 95(a) |
The Appellate Authority upheld the original ruling, confirming that the appellant's activity is classified as a supply of services. Consequently, the revenue is taxable at 5% without the benefit of Input Tax Credit (ITC). The authority rejected the appellant's claim that the activity should be treated as a supply of goods.
Reasoning
The authority relied on the **License Agreement** between the appellant and the Indian Railways, which explicitly defines the scope of work as 'supply of catering service'. Furthermore, the authority noted that **Notification No. 11/2017-Central Tax (Rate)**, as amended by Notification No. 13/2018-Central Tax (Rate), specifically classifies the supply of food or any other article for human consumption by licensees of Indian Railways at platforms as a 'Supply of Service'. The authority concluded that the language of the notification is plain and must be interpreted as it stands, overriding the appellant's reliance on pre-GST era case laws.
Provisions relied on
- Section 95(a) of the CGST Act
- Section 99 of the Uttar Pradesh Goods and Service Tax Act, 2017
- Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017
- Notification No. 13/2018-Central Tax (Rate) dated 26.07.2018
For the practitioner
This ruling clarifies that catering services provided by licensees at railway platforms are **categorically classified as a supply of services** subject to 5% GST without ITC. It serves as a warning to practitioners that contractual terms in license agreements with Indian Railways will be strictly interpreted to determine the nature of supply. It does not provide relief for those seeking to classify such activities as a supply of goods to avail ITC.
Source
This is a summary prepared from the published order, which is a scanned document. It is a reading aid and not the authority: where the two differ, the order governs. Verify every provision against the original before relying on it.
Original order: https://www.gstcouncil.gov.in/sites/default/files/2024-02/up_aaar_09_2019-20_01.11.2019_afp.pdf
Legibility of the scan, as read: high.
Prepared 13-10-2026.
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