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Due to ever-increasing demand for banquet halls and catering services for events like weddings, birthday parties, corporate events, kitty parties and other social gatherings, the banquet hall and catering service industry has become a high-in-demand industry. In case you are planning to open a banquet hall or catering business any time in the near future, it is important that you understand the GST implications these services attract.
Doing so is essential to ensure proper tax compliance as well as effective cost management. Some services attract 5% GST rate whereas others attract 18% GST rate. In this blog post, we shall provide you with the lists of GST rates on banquet halls and catering services in 2026.
Banquet halls are taxed under GST based on the type of services they provide. The GST rates on banquet and catering services as of 2026 are as follows:-
|
Nature/Type of Service Provided |
Applicable GST (in %) |
ITC Availability |
Remarks |
|
Hall rental + catering + staff |
18% |
Yes |
Treated as combined (composite) supply |
|
Hall rental only (no food) |
18% |
Yes |
Treated as renting of property for events |
|
Banquet halls for weddings, birthdays, kitty parties and corporate events |
18% |
Yes |
GST charged on total service value including facilities and services |
The GST rate for catering depends on whether the service is provided on site or off site. The catering services GST rate is determined by nature of service and whether Input Tax Credit is claimed. The GST rates on catering services as of 2026 are as follows:-
|
Nature/Type of Service Provided |
Applicable GST Rate (in %) |
ITC Availability |
Remarks |
|
On site catering (incl. at events in hotels & halls) |
18% |
Yes |
Composite supply incl. hall + food + service |
|
Off site catering (when food gets delivered to premises) |
5 or 18% |
If 5% GST rate, then ITC is not available. |
5% GST rate is applicable when supplied as restaurant/catering service without ITC. However, 18% GST rate applies when structured as a taxable catering service with ITC. |
|
Restaurant-style catering (i.e., buffet at hotel/restaurant) |
5% or 18% |
No ITC is available if GST rate is 5%. |
Based on whether it’s a standalone restaurant or part of a hotel, along with ITC eligibility. 5% for standalone (no ITC) and 18% for hotel-based (with ITC). |
|
Food trucks or mobile catering |
5% or 18% |
ITC is not available if GST rate is 5% |
Varies on basis of service classification |
To ensure compliance with GST regulations, it is necessary to use the correct HSN or SAC code at the time of invoicing clients for catering. The HSN and SAC codes for catering and banquet are as follows:-
|
HSN/SAC Codes |
Applicability |
|
996334 |
Applicable for catering services in exhibition halls, events, marriage halls and other outdoor/indoor functions. |
|
996311 |
Applies to room or unit accommodation services provided by hotels, inn, guest house, club etc |
|
996331 |
Applies to services provided by restaurants, cafes and similar eating facilities including takeaway services, room services and door delivery of food. |
|
996332 |
Meant for services provided by hotels, inn, guest house, club etc including room services, takeaway services and door delivery of food. |
|
996333 |
Applicable on services provided in canteen and other similar establishments |
|
996335 |
Applies to catering services in trains, flights, etc. |
|
996336 |
Applies to preparation and/or supply services of food, edible preparations, alcoholic & non-alcoholic beverages to airlines and other transportation operators |
|
996337 |
Other contract food services |
|
996339 |
Other food, edible preparations, alcoholic & non-alcoholic beverages serving services n.e.c. |
|
997212 |
Renting of Banquet Hall / Marriage Hall |
Businesses in banqueting and catering sector must register for GST if they fulfill following conditions:-
If their total annual turnover from services exceeds Rs. 20 lakh (or Rs. 10 lakh if business is located in one of the special category states).
If the business is engaged in B2B services and needs to issue GST compliant invoices.
The business wishes to claim Input Tax Credit (ITC) on purchases.
Apart from above mentioned conditions, GST registration is also required if the business engages in inter-state supply of services or operates through e-commerce platforms that mandate GST compliance.
Now that you know about GST rates applicable to banquet halls and catering services, you can plan your expenses as well as manage your tax compliance better. For professional assistance in GST registration, get in touch with our GST compliance team at Registrationwala.
Q1. When is GST registration mandatory for business providing catering services?
A. The GST registration is mandatory for a catering business if it fulfills any of following conditions:- (i) when its annual turnover exceeds Rs. 20 lakh (Rs. 10 lakh for special category states), (ii) when it makes inter-state supplies, (iii) when it opts to claim Input Tax Credit (ITC) or (iv) if the business deals in B2B services and needs to issue GST-compliant invoices. It is also required for operating through e-commerce platforms that mandate GST registration.
Q2. What is ITC?
A. ITC full form is Input tax credit. It basically refers to a mechanism to avoid cascading of taxes. It lets GST registered businesses to reduce GST paid on purchases from GST collected on sales.
Q3. What are the special category states under the GST regime?
A. The special category states under the GST regime are as follows:- Arunachal Pradesh, Assam, Jammu & Kashmir, Himachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura and Uttarakhand. Businesses in these states are subject to reduced turnover thresholds for GST registration compared to businesses in other states.
Q4. What is the difference between HSN and SAC?
A. HSN codes are assigned to goods. On the other hand, SAC codes are assigned to services. This is the major difference between them.
Disclaimer:- We have tried our best to provide our readers with the most accurate and up to date information in this article. However, we cannot guarantee 100% completeness/accuracy of the information we have provided. This content is meant for informational purposes only. We do not advise our readers to make financial, investment or other decisions based on this article and recommend them to verify with official sources.
Hi, I'm Sachin Chawla. I’m a commerce graduate from Agra University and a Chartered Accountant (2015) with DISA certification. I focus on helping businesses with formation, management, tax and FEMA matters, business licenses and regulatory compliance, IP advisory, risk management and auditing among others. Through my articles, I aim to share my expertise and provide practical guidance in these areas.
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