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2019 (10) TMI 562 - AAR - GSTClassification of services - levy of GST - canteen or outdoor catering services? - services rendered by the applicant under cash & carry model - scope of supply - N/N. 11/2017 - Central Tax (Rate) [as amended vide notification No. 46/2017-CT (Rate) dated 14.11.2017] - whether taxable at the rate of 2.5% in terms of entry 7 (i) of the notification No. 11/2017CT (Rate) [as amended vide notification No. 46/2017-CT (Rate) dated 14.11.2017]? HELD THAT:- Under the cash and carry model, it is seen that the materials offered to the employees on the menu card are displayed and there is no binding on the part of the employee to purchase the same. Though the menu is decided in consultation with the employer, it has no bearing on the contract between the supplier (applicant) and the person receiving the service (employee). Since the employee is the person who pays the consideration, he becomes the recipient of the service and the service is rendered by the applicant to the employee. The recipient is not bound to purchase the items and only on his decision to purchase the food items available for sale, the contract of supply is entered and the consideration is as shown in the menu card. Hence it is a contract of supply between the applicant and the employee. The transactions relating to cash and carry model are examined and found that since the supply is neither event based nor occasional nature, the same does not get covered under the entry 7(v). Whether the applicant is a restaurant or eating joint for the purposes of this entry is the moot question. Here it is seen that the applicant is preparing the food items at the place and is selling the goods to the purchasers. Hence this amounts to sale of food items for consumption either in the premises or away from the premises. There is no condition in the entry that the premises should be own. It only mentions that the premises must be place where the services are supplied - The supply of services is happening in the premises of CISCO and the goods are prepared in the same premises and the services are provided there itself. Hence it would qualify as an eating joint (including mess, canteen) wherein the service is supplied. Explanation 1 is only clarificatory in nature and the applicant’s activity of cash and carry does not fit in the transactions narrated in Explanation 1, but still gets covered under the main entry 7 (i) of the Notification. There is no condition as to the ownership of the premises in the said main entry and hence there is no need of going into the ownership of the premises or the contract. The rate of tax applicable on the above transaction is 2.5% CGST and 2.5% SGST subject to the proviso that credit of input tax charged on goods and services used in supplying the service has not been taken.
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