New

Published on:

March 17, 2026

Swipe Admin

Blog |

Explore GST

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

Looking for the right GST tool for your catering business?

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.