HSN Code for Catering Services: GST and Tax Compliance If you own a catering business or are planning to start one, it is required to understand the HSN Code for Catering Services. This HSN code for catering services helps you apply the correct GST rate, create proper invoices and stay legally safe. Many caterers confuse restaurant GST rates with catering GST, but both are not always the same. So let’s understand it in simple and practical ways. This article will help you understand GST rates, HSN or SAC classification, input tax credit rules & common mistakes caterers should avoid.
What Is the HSN Code for Catering Services Before we dive deeper, let’s clear one thing,
For services, GST doesn’t actually use HSN (Harmonized System of Nomenclature). Instead, it follows SAC (Service Accounting Code).
Many people still type “HSN Code for Catering Services” on Google even though the correct term under GST is SAC (Service Accounting Code). That’s why you’ll commonly see this term used, even though SAC is the correct code for services.
Catering services fall under:
SAC Code : 9963
Category : Accommodation, food & beverage services
Under this category, catering is treated differently from regular restaurant dining.
Service / Item HSN / SAC GST Rate Catering services HSN 9963 / SAC 9963 5%
Note : Catering is officially a service (SAC), but HSN is shown here for reference as many people search using this term.
Types of Catering Services Covered Under GST Most people searching for the HSN Code for Catering Services really want to know the correct SAC code and GST rate.
Here’s how it works:
SAC 996337 – Catering Services
This includes:
Outdoor catering
Wedding catering
Corporate catering
Party catering
Industrial catering
So if you provide food at a client’s location (not your own restaurant premises), it generally falls under catering.
GST Rate Under HSN Code for Catering Services Now let’s talk about the GST rate, because this is where many businesses make mistakes.
As per the latest practice under Indian GST law , catering services are taxed differently depending on where and how the service is provided. Rates are broadly classified in two slabs:
5% GST (Without Input Tax Credit – ITC) This applies to:
Outdoor catering food provided at client venues without accomodation
Independent event catering which includes weddings, parties
Corporate / industrial canteen arrangements under contract
Meals provided by Indian Railways/IRCTC
Under this rate, Input tax credit is not available. This means you cannot claim back GST paid on inputs used to provide these services.
18% GST (With Input Tax Credit – ITC) This applied when:
Catering is provided by hotels or banquet halls where room tariff (or equivalent service pricing) is ≥ ₹7,500 per day
Catering is bundled with venue rental or comprehensive event packages
The service is treated as a composite supply with accommodation or high-end amenities
Under this rate, you can get back the GST you paid on items like ingredients, equipment & other expenses used for your business.
GST Rate Table for Catering Services Catering Services GST Rate ITC Available? Standalone outdoor catering 5% Not Available Wedding or event catering (food-only contract) 5% Not Available Corporate or industrial canteen services 5% Not Available Catering by Indian Railways / IRTC 5% Not Available Hotel-based catering in high-end hotels (room tariff ₹7,500 or more) 18% Available Catering bundled with venue rental or event services 18% Available
Difference Between Restaurant and Catering GST Many small business owners mix these up. Let’s simplify it.
Restaurant Services
Food served at your own premises
Often taxed at 5% GST (no ITC)
Catering Services
Food supplied at a client’s venue or event location
Could be 5% or 8% GST depending on how the service is structured and whether accommodation/venue rental features apply
If you cook and deliver food for a wedding at a banquet hall, that’s usually catering — but the applicable GST rate will depend on whether the overall service is tied to a hotel/venue tariff structure.
Tax Compliance for Catering Businesses Understanding the HSN Code for Catering Services is just the first step. You also need to maintain proper GST compliance.
Here’s what you must do:
GST Registration
You must register under GST if:
Your annual turnover exceeds the prescribed limit
You supply services across states
Correct Invoice Format
Your invoice should include:
GSTIN
Invoice number and date
SAC Code 9963
Description of service
Taxable value
CGST + SGST or IGST
Total amount
Swipe E-invoice software helps you generate GST-compliant invoices quickly and accurately.
Input Tax Credit Rules for Catering This is one of the most important areas under the HSN Code for Catering Services. Here are the ITC rules for catering:
If your catering service is taxed at 5% GST, you cannot claim ITC on inputs.
If your service falls under 18% GST, you can claim ITC on raw materials, equipment, and other eligible purchases
ITC can significantly reduce your tax liability when you qualify for the 18% slab
Common Mistakes in Using HSN Code for Catering Services Many businesses unknowingly make these errors:
Using restaurant SAC instead of catering SAC
Claiming ITC when not eligible
Charging wrong GST rate
Not mentioning SAC code on invoice
Mixing catering and decoration services under one line item
Avoiding these mistakes can save you from GST notices, penalties & compliance issues.
How to Classify Your Catering Service Correctly First, ask yourself some of these questions:
Are you cooking & serving meals at a client’s location?
Is the service bundled with venue rental, accommodation, or event facilities?
Who is the principal supplier you or the venue owner?
Correctly determining the nature of supply helps you apply the right GST rate.
Why the Correct HSN Code for Catering Services Matters Using the correct classification helps you:
Avoid GST penalties
Maintain clear accounting records
Prevent return mismatches
Pass GST audits smoothly
Maintain credibility with corporate clients
Example: Practical Scenario Let’s understand with a simple example.
You cater a wedding event:
Food bill: ₹5,00,000
GST charged: 5% or 18% based on service structure
Total invoice: ₹5,00,000 + applicable GST
Let's see both examples:
If you are a part of their team then total invoice will be 5,00,000 + 18% GST = ₹5,90,000 (part of hotel/venue package)
If you hired directly by the client then total invoice will be ₹5,00,000 + 5% GST = ₹5,25,000 (independent catering)
Using a GST-compliant accounting solution like Swipe billing software helps caterers and restaurants calculate taxes correctly and generate legally compliant invoices.
Documents You Should Maintain For proper GST compliance, keep:
Purchase invoices
Sales invoices
Event contracts
Payment receipts
GST returns filed copies
Bank statements
Also read: How to Get Your FSSAI License: A Simple Step by Step Guide
Conclusion Running a catering business is already challenging. So having an understanding about the HSN Code for Catering Services and how GST applies ensures smooth compliance and better financial planning.
To summarize:
Catering services fall under SAC 9963
GST can be 5% with no ITC or 18% with ITC depending on service nature
Correct invoicing and filing are essential
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FAQs 1. What is the HSN code for catering services? Catering services are covered by SAC 9963 in GST. Services use SAC codes instead of HSN codes but many people still call it the HSN code for catering.
2. Is GST on catering 5% or 18%? It can be 5% or 18% and depends on the type of service.
5% GST – Usually for regular outdoor or event catering, no ITC is allowed.
18% GST – When catering is linked with hotels, banquets or event packages, ITC is allowed.
3. Can a caterer claim Input Tax Credit? If GST is 5% → ITC is not allowed.
If GST is 18% → ITC is allowed.
4. Is GST registration required for catering? Yes, if your yearly turnover crosses the GST limit or you provide services in different states.
5. Should I mention SAC code on invoices? Yes. Make sure your catering services show SAC 9903 so you follow GST rules.
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