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2022 (2) TMI 1212 - AUTHORITY FOR ADVANCE RULING, RAJASTHANClassification of supply - supply of goods or supply of services - supply of food and beverages (as per illustrative list mentioned in Statement of Facts above) by the eating joints - Dine In - Take Away - Delivery - applicable tax rate on the supply made by the applicant - Input tax credit if supply is treated as supply of goods and if supply is treated as supply of services - HELD THAT:- 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 shelf 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 - the activity of sale of aforementioned food items alongwith services thereof to be performed by the applicant in respect of central kitchen/ eating joints by way of Dine In, Take away & delivery is covered under 'supply' as per section 7 of the CGST Act. 2017 and liable to tax as per section 9 of the CGST Act, 2017. As per explanatory notes to the scheme of classification under heading 9963: Accommodation, Food and Beverage service, the activity to be performed by the applicant will be classified under heading 996331 “services provided by Restaurants, Cafes, and similar eating facilities including take away services, Room services, and door delivery of food”. In present facts since the eating joints of the appellant are not intended to be located in any premises having hotel accommodation services. Hence the case of the applicant is not covered in exclusion as premises will be as standalone restaurant(s) - the supply of food by the entity partially or completely cooked in the central kitchen through or from the various eating joints would be covered by 'restaurant service' and the supply of all the items of food and beverages offered by the eating joints/central kitchen of applicant are classifiable under HSN 9963 under SI. No. 7(ii) of Notification No. 11/2017-CT (Rate) dated 28.06.2017 as amended time to time and are taxable at the rate of 5% (without ITC). Classification and applicable tax rate on the supply - HELD THAT:- In the instant case supply made by the applicant is classifiable under Chapter, Section or Heading 9963 under 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). Availability of Input Tax Credit (ITC) to the applicant if the supply considered as supply of goods or as supply of service - HELD THAT:- Supply to be made by the applicant is covered under “restaurant service”, as defined in notification No. 11/2017- Central Tax (Rate) as amended and attract 5% GST provided that credit of input tax charged on goods and services used in supplying the service has not been taken. The aforesaid notification is prescribing rate with specific condition, no option is provided. Wherever the intention to provide option is there, it is clearly mentioned by providing multiple rates 'with ITC' and 'without ITC'. Thus, the applicant is not entitled to take ITC as per condition laid down at SI. No. 7(ii) of Notification No. 11/2017 - CT (Rate) dated 28.06.2017.
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