The Goods and Services Tax Appellate Tribunal, Hyderabad Bench (Court II), has allowed Revenue’s appeal and held that food supplied by an outsourced caterer to a Government hospital (MGM Hospital, Warangal) for consumption by in-patients is not a composite supply of healthcare services in the caterer’s hands and is exigible to GST, reversing the First Appellate Authority’s finding that the supply was exempt as part of composite healthcare. The ruling by Member (Judicial) A.P. Ravi and Member (Technical) Duvvuri Krishna Srinivas in APL/149/HYD/2026 (M/s Shivenari Canteen Services, decided 18.09.2026) provides a detailed analysis of Section 2(30) (composite supply) and the scope of CBIC Circular No. 32/06/2018-GST.
The Tribunal held that in the caterer’s hands there was only one supply — supply of food — and without two or more taxable supplies, the threshold test for composite supply under Section 2(30) was not met. The CBIC Circular’s clarification that food supplied to in-patients on medical advice is part of composite healthcare applies to the healthcare service provider (the hospital), not to an outsourced food supplier. The reliance by the respondent on the Principal Accountant General’s letter and MGM Hospital’s internal order was rejected — neither is a competent authority to clarify GST law. However, finding no suppression or wilful misstatement (the caterer had relied on the circular in bona fide belief), the Tribunal invoked Section 75(2) to convert the proceedings from Section 74 to Section 73 and directed recomputation with the benefit of cum-tax valuation under Rule 35, since no tax had been separately collected.
- 2026-juristway.com-2554-GSTAT(Hyderabad)-GST | GSTAT Hyderabad Bench | APL/149/HYD/2026 | 18.09.2026