Food in trains to cost more, thanks to GST

The latest AAR decision says that a train is a medium of transport and cannot be termed restaurant, eating joint, mess or canteen.

The cost of food and beverages served in trains will cost more as such items would no longer be under 5% GST slab, but will instead attract 18% tax, as per the latest decision by the Authority for Advance Rulings (AAR).

Canteen services, restaurants and food outlets come under 5% GST slab while outdoor catering has been put under 18% slab. Subsequently, in January supplies made to Indian Railways were also put in the 5% bracket via a circular, reported ET.

The latest AAR decision says that a train is a medium of transport and cannot be termed restaurant, eating joint, mess or canteen.

The AAR ruling came in response to an application by Deepak & Co that entered into an agreement with the Indian Railways for supply of food and beverages (packaged, cooked or at MRP) on mail and express trains, reported ET.

In November last year, eating out and mass consumption products became cheaper as the lower GST rates on over 200 items came into effect. The GST Council, chaired by Finance Minister Arun Jaitley and comprising state counterparts, had in November cut rates on these items to provide relief to consumers and businesses amid economic slowdown.