Supply of Food and Beverages by the eating joints by way of Dine-In, Take Away, Delivery is ‘restaurant service’ under GST: AAR
The Rajasthan Authority of Advance Ruling (AAR) has ruled that the Supply of Food and Beverages by the eating joints by way of Dine In, Take Away, Delivery is ‘restaurant service’ under GST.
Applicant, M/s Shrivika Foodcrafts is looking forward to setup restaurants which will be offering various food items including cooked food, beverages and bakery items.
The applicant will obtain a license from FSSAI under the Business Category “Food Services -Restaurants”. The applicant will have a dedicated central kitchen for the preparation of food items and there will be various eating joints under the brand name of applicant from where the food preparations will be offered to the customers. The consumers will only have access to such eating joints.
A substantial part of cooking process of majority food items will be carried out at the central kitchen and the eating joints will receive the pre-cooked or semi – cooked preparations from the kitchen in different forms, containers or packaging having a self-life as applicable for the food item. The preparations may be sent to the outlets in packed form to be offered to the customers as such or to be further processed for offering the food items or dishes at the choice and desire of consumers.
Applicant has sought the advance ruling on the issue in respect of Classification of any goods or services or both; and Admissibility of input tax credit of tax paid or deemed to have been paid.
The coram of J.P.Meena (Central Tax) and M.S.Kavia (State Tax) has ruled that the supply will be treated as Supply of ‘restaurant service’ as per clause (b) of entry 6 of the Schedule II to section 7 of the CGST Act, 2017.
“Supply made by the applicant are classifiable under Chapter, Section or Heading 9963 at SI. No. 7(ii) of Notification No. 11/2017 – CT (Rate) dated 28.06.2017 as amended time to time and is taxable at the rate of 5% (without ITC),” the AAR said.
The AAR has ruled that as the supply in the instant case will be treated as Supply of ‘restaurant service’ as per clause (b) of entry 6 of the Schedule II to section 7 of the CGST Act, 2017 therefore, it will attract 5% GST (2.5% CGST + 2.5% SGST) provided that credit of input tax charged on goods and services used in supplying the service has not been taken.
“As the supply in the instant case will be treated as Supply of ‘restaurant service’ as per clause (b) of entry 6 of the Schedule II to section 7 of the CGST Act, 2017 therefore, it will attract 5% GST (2.5% CGST + 2.5% SGST) provided that credit of input tax charged on goods and services used in supplying the service has not been taken,” the AAR added.
