Classification of supply - rate of tax - supply of ice cream from any of the outlets of HRPL - to be considered as supply of ‘restaurant services’ or not? - applicable rate of tax thereon in accordance with notification No. 11/2017-CT(Rate) dtd 28.6.2017 as amended from time to time.
If not the restaurant services, supply of ice cream from any of the outlets of HRPL can be considered as supply of ice cream from ice cream parlour & chargeable to GST @ 18%?
HELD THAT:- The outlets of the applicant selling already manufactured ice-cream, do not engage in any form of cooking. As already discussed above, restaurant service involves the aspect of cooking/preparing during the course of providing service. Hence, as recommended by the Council, supply of ice-cream [not prepared, cooked] by the outlets of the applicant, stands on a different footing than restaurant service. Further, their activity entails supply of ice cream as goods [a manufactured item] and not as a service, even if certain ingredients of service are present.
Ice cream sold by the outlets of the applicant are already manufactured ice-cream; that it is not their case that the ice cream were manufactured/cooked/prepared by them; that the applicant is on record that their ice cream division was sold way back in the year 2017 & therefore ice cream sold by the applicant’s outlet would not fall within the ambit of ‘restaurant service’ and is supply of goods and hence would attract GST at the rate of 18%.
When an ice cream is ordered as a desert along with cooked or prepared food at their outlets - whether it would be treated as supply of goods or supply of services? - HELD THAT:- Under GST, a composite supply mean a supply made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both, or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply. Here, principal supply means supply of goods or service which constitutes the predominant element of a composite supply and to which any other supply forming part of that composite supply is ancillary. Likewise, a mixed supply means two or more individual supplies of goods or services, or any combination thereof, made in conjunction with each other by a taxable person for a single price where such supply does not constitute a composite supply.
Supply of ice cream, as a desert by the outlets of the applicant along with cooked or prepared food is therefore, naturally bundled and supplied in conjunction with the principal supply i.e. cooked/prepared food, in the ordinary course of business. Thus, the supply of ice cream along with cooked or prepared food, falls within the ambit of restaurant service.