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2021 (4) TMI 424 - AAR - GSTClassification of supply of goods/services - rate of GST applicable - Restaurant services - Cakes, bakery items, ice creams, chocolates, drinks and other eatable products prepared at the premises of the applicant and supplied to the customers - facility to consume the same in the air-conditioned premises itself covered under the restaurant services - composite supply or not - supply of items such as birthday stickers, candles, birthday caps, snow sprays etc. related items - principal supply of goods - sale of handmade chocolates which are manufactured in the workshop of the Applicant - applicability of composition scheme of tax or not. Cake, Ice Cream and other items of food which are made to order along with certain services - HELD THAT:- The transaction of the applicant is examined and it was found that the applicant is supplying Cake, Ice Cream and other items of food which are made to order along with certain services. Hence the applicant is supplying both goods and services - Since the supplies made by the applicant in its outlets involve both supplies of goods and services, with one of them as principal supply i.e. supply of goods which are naturally bundled and supplied in conjunction with each other, therefore, the same has to be considered as a composite supply. Further, Restaurant Services have been defined under the purview of composite supply (in clause (b) of para 6 of Schedule -II) - 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, cakes and other eatables, 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, more specifically the 'Restaurant Service' - 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 28-6-2017 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. Supply of items such as birthday stickers, candles, birthday caps, Balloon, Carry Bags, snow sprays etc - HELD THAT:- The said related items are being purchased and sold as such without any further processing in the restaurant. These items are not articles of foods and drinks and are covered under goods. Sale of such bought out goods as such, is not a service but sale of goods - Since this notification is applicable only to supply of services and not supply of goods, only Notification No. 1/2017-Central Tax (Rate) is applicable and hence all the supply of bought out goods as such which are enlisted by the applicant is taxable as 'supply of goods' and at rates applicable as per Notification No. 1/2017-Central Tax (Rate), dated 28-6-2017 as amended from time to time - since the goods are supplied and output tax is payable on the same, the applicant is eligible to take applicable input tax credit which is admissible as per the GST laws. Chocolates - HELD THAT:- The raw chocolates are manufactured in the nearby workshop of the applicant which are utilised for the purpose of providing other services such as shakes, brownies and are also retailed by packing in different containers as per the choice of the customer . In no case, chocolates are sold as such from the work shop but are customized and sold from the outlets - the sale of handmade chocolates which are manufactured in the workshop and brought to the outlets for further processing will be covered under the 'restaurant services'.
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