GST invoice format for a canteen (industrial and office canteen contractor)
A canteen contractor running food service inside a factory, office or hospital supplies canteen service under SAC 996333. The restaurant entry expressly includes supply at a canteen, mess or cafeteria of an institution on a contractual basis, taxed at 5% without input tax credit, as long as it is not event based or occasional. The invoice should show the contract reference, billing period, meal counts by shift or category, rates per meal, and the split between employer subsidy and employee recovery.
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Sample prices are illustrative. Check the GST rate for your exact item or service before billing.
Extra fields a canteen invoice needs
Contract number and period
Canteen contracts run for a year or more. The contract reference and billing period link each invoice to the agreed rates and scope.
Meal counts by category
Breakfast, lunch, dinner and tea counts, by shift, are the basis for billing. Including the counts lets the client's admin team verify against coupons or swipe data.
Rate per meal
Contract rates per meal differ by category. Showing them on the invoice makes the computation of each line clear.
Employer and employee portions
Many employers pay part of the meal cost and recover the rest from staff. The invoice should state who is billed for which part, as it affects the recipient and documentation.
Client GSTIN and site address
Large clients run several plants. The site address and the GSTIN of the client's unit in that state ensure correct B2B reporting.
Kitchen FSSAI licence
The contractor's licence for the canteen kitchen on site should be printed, since food safety audits at factories check it.
Standard GST invoice fields
Rule 46 of the CGST Rules applies to every tax invoice, including this one:
✓Supplier name, address and GSTIN
✓Consecutive invoice number (max 16 characters, unique for the year)
Notification 11/2017-Central Tax (Rate) includes, in the restaurant entry, supply at a canteen, mess, cafeteria or dining space of an institution such as a hospital, industrial unit or office, by such institution or any other person under a contractual arrangement, provided the supply is not event based or occasional. That brings regular contract canteens to 5% without credit. A one-off lunch for a plant inauguration is event based and falls outside this explanation, so it should be billed under the outdoor catering rules instead.
No credit on the contractor's costs
At 5% without credit, a canteen contractor cannot claim GST paid on kitchen equipment, gas, vegetables or packaging used for the canteen. Contract pricing should reflect this. If the contractor also runs outdoor catering or other services taxed with credit, common credit must be apportioned and only the share for taxable-with-credit supplies claimed.
Recovery from employees
When the employer recovers part of the meal cost from employees, the question is who supplies what to whom. In a typical arrangement the contractor bills the employer for all meals and the employer recovers a portion through payroll. CBIC has clarified that perquisites provided by an employer to employees under the employment contract are not treated as supplies, but each canteen arrangement differs. Where the contractor collects directly from employees, it must bill those employees for their share. Structure the contract and invoices carefully, and take advice for your specific arrangement.
Clients cannot usually claim credit
Section 17(5) blocks credit on food and beverages, except where provision is obligatory under a law such as the Factories Act or where the inward supply is used for an outward supply of the same category. A factory obliged to run a canteen may be able to claim credit, whereas an office canteen usually cannot. The contractor's invoice should be complete and correct either way, as the client decides its own eligibility.
Monthly invoices and e-invoicing
Canteen contracts are billed monthly. The invoice date is the time of supply for the month's service when issued within the time allowed. Large contractors whose aggregate turnover crosses the e-invoicing limit must generate an IRN for these B2B invoices. Keep the meal count sheets signed by the client as annexures.
Common billing mistakes
✕Billing a one-off event lunch at a factory as contract canteen service instead of as catering.
✕Claiming input tax credit on kitchen equipment installed at the client site while charging 5%.
✕Using the client's head-office GSTIN instead of the GSTIN of the plant in the state where meals are served.
✕Issuing monthly invoices without meal count annexures, leading to payment disputes.
✕Missing an IRN on B2B canteen invoices after crossing the e-invoicing turnover limit.
Canteen GST invoice: FAQ
What is the GST rate on industrial canteen services?
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A contract canteen in a factory, office or hospital charges 5% without input tax credit, provided the supply is regular and not event based or occasional.
Which SAC applies to canteen services?
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SAC 996333 covers services provided in canteens and similar establishments.
Can a factory claim credit on canteen invoices?
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Credit on food is blocked, except where providing it is obligatory under a law. A factory required by law to provide a canteen may qualify; check with your adviser.
Is a festival lunch at the factory billed under the canteen contract?
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Event-based or occasional supplies are excluded from the canteen explanation, so treat it as catering and bill it separately.
Do canteen invoices need meal count details?
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GST law needs quantity and value, but detailed counts by meal and shift help clients verify invoices quickly.
Should a canteen contractor print the employer subsidy on the invoice?
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If the contractor bills the employer for the full meal value, the subsidy is internal to the employer and need not appear. If the contractor bills employees directly for part and the employer for the rest, each invoice should show only the portion charged to that recipient.