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2019 (10) TMI 866 - AAR - GSTClassification of supply - composite supply or not - supply of ice creams, chocolates, ice cream cakes, and pizza cakes in an IBACO outlet - principal supply is the supply of goods namely the ice cream and other products while the services supplied namely the air conditioned place, place to sit, the service of mixing various ice creams being naturally bundled in the ordinary course of business - serial no. 6(b) of schedule II of CGST Act and serial no. 6(b) of Schedule II of Karnataka GST Act - Whether the said supply will be classified under chapter “9963” and chargeable to 5% GST rate in accordance with serial no. (ii) of N/N. 46/2017 dated 14.11.2017 - Central Tax (Rate) read with serial no. 7(iv) of N/N.11/2017 dated 28.06.2017 and similar notification under KGST Act? HELD THAT:- The transaction of the applicant is examined and found that the applicant is supplying ice cream and other items of food which are made to order along with certain services. Hence the applicant is supplying both services and goods and they are naturally bundled - Since the supplies made by the applicant in IBACO outlets involve both supplies of goods and services, with one of them as principal supply, the same has to be considered as a composite supply. The composite supply of goods being food or any other article for human consumption or any drink, where supply or service is for a consideration, then such composite supply shall be treated as a supply of services. Since the applicant is supplying ice creams, which are items for human consumption, by way of or as part of any service or in any other manner, the composite supply has to be treated as a supply of services. The applicant is supplying items of food as a part of service and since the provision of eating in the premises is provided or the customers may take the same away from the applicant’s place, the transactions under question are covered under the amended provision of Entry 7(i) of Notification No. 11/2017- Central Tax (Rate) dated 28.06.2017 as amended by Notification No.46/2017 - Central Tax (Rate) dated 14.11.2017 and attracts a tax of 2.5% without any input tax credit.
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