TMI Blog2023 (1) TMI 84X X X X Extracts X X X X X X X X Extracts X X X X ..... staurant service is leviable tax rate of GST @ 5% with no input tax credit as per Sr. No. 7(ii) of Notification No.11/2017 - Central Tax (Rate) dated June 28. 2017, read with Sr. No. 7(ii) of Notification No. 11/2017 - State Tax (Rate) dated June 30, 2017. The readily available food items (not prepared/cooked in the restaurant) sold over the counter by the Applicant to the customer whether consumed in the restaurant or by way of takeaway does not qualify as 'restaurant services' instead of falls under supply of goods which is liable to applicable rate of GST Tax - The readily available food and beverages (not prepared in the restaurant) sold over the counter by the Applicant is supply of goods which is liable to applicable rate of GST Tax and does not qualify as restaurant services. - GUJ/GAAR/R/2022/51 - - - Dated:- 30-12-2022 - MILIND KAVATKAR AND AMIT KUMAR MISHRA, MEMBER Present for the applicant : Chintan Vasa (C.A.) Brief facts: M/s Riddhi Enterprise (hereinafter referred to as 'the Applicant') is in the restaurant business which offers a variety of food items including food and beverages prepared at the restaurant as well readily purcha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e customer chooses to consume the product within the restaurant premises or takes it away for consumption elsewhere. 3.1 The infrastructure facility at the restaurant is uniformly offered to all the customers irrespective of whether they choose to consume the food/beverages at the restaurant premise or take it away for consumption elsewhere. 3.2 The storage space/area for items required for preparing food and beverages in the kitchen as well as the readily available food/beverages sold over the counter is common. 3.3 The staff of the restaurant is commonly handling the orders for food and beverages to be prepared in the restaurant kitchen as well as the readily available food/beverages sold over the counter irrespective of whether they are consumed in the restaurant premises or as a takeaway. The display of food/beverage items is also common for service by any of the methods. 3.4 The applicant has submitted that there is a common billing counter, software, and books of account for all the orders. There is no separate billing mechanism for the food and beverages prepared in the restaurant and for the readily available food/beverages sold over the counter. 4. The Appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt services and not hotel accommodation services, it does not qualify as 'specified premises'. 7. The applicant has submitted that considering the above, the food and beverages prepared in the restaurant and supplied by the Applicant to its customer qualify as restaurant services and accordingly liable to GST @ 5% without ITC as per Sr. No. 7(ii) of the Services Rate Notification. GST @ 5% without ITC would apply to all preparation of food and beverages irrespective of whether the customer chooses to consume the preparations within the restaurant premises or takes it away for consumption elsewhere. 8. The Applicant's view is that the readily available food and beverages (not prepared in the restaurant) sold over the counter by the Applicant to its customer, whether consumed in the restaurant or by way of takeaway, qualifies as 'restaurant services' classifiable under SAC 996331: Services provided by restaurants, cafes and similar eating facilities including takeaway services, room services and door delivery of food' leviable to GST @ 5% with no input tax credit. 8.1 Explanation (xxxii) of paragraph 4 of the Services Rate Notification defines ' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. Food parcels (or takeaways) front restaurants shall also attract tax at the rate of 5% without input tax credit. - Emphasis supplied. 8.4 The applicant has submitted that taking into consideration the above, in the following table the criteria to qualify as restaurant services and whether they are fulfilled in the given case/question is as below: Sr.No. Condition Whether fulfilled? 1. Whether there is a supply of food or any other article for human consumption or any drink, provided by a restaurant? Yes. The readily available over-the-counter food and beverages are provided by the restaurant which is for human consumption 2. Whether such supply is for consumption on or away from the premises where such food or any other article for human consumption or drink is supplied? Yes. The readily available over-the-counter food or beverages supplied can be consumed at the restaurant or it can be taken away from the restaurant for consumption elsewhere. 3. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith applicable conditions will also be applicable to all such goods also. Input credit wilt not be allowed in this case. - Emphasis supplied. 10. Question on which Advance Ruling sought: I. Whether the food and beverages prepared and supplied by the Applicant to its customers whether consumed in the restaurant or by way of takeaway qualifies as 'restaurant services' and is classifiable under SAC '996331: Services provided by restaurants, cafes and similar eating facilities including takeaway services, room services and door delivery of food' leviable to GST @ 5% with no input tax credit as per Sr. No. 7(ii) of Notification No. 11/2017 - Central Tax (Rate) dated June 28, 2017, read with Sr. No. 7(ii) of Notification No. 11/2017 - State Tax (Rate) dated June 30, 2017? II. Whether the readily available food and beverages (not prepared in the restaurant) sold over the counter by the Applicant to the customer whether consumed in the restaurant or by way of takeaway qualifies as 'restaurant services' classifiable under SAC '996331: Services provided by restaurants, cafes and similar eating facilities including takeaway services, room servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or drink is supplied. In the foods or any other article for human consumption prepared /cooked in the restaurant kitchen and served such foods to customer either in the restaurant premises or take away or delivery at customer place are covered under the category of 'restaurant service'. 15.2 The applicant has on his own submitted that they prepare food and other food item in the kitchen situated at restaurant premises and serve to the customers as per their order. The customer as per their choice either consume such items at restaurant or take the same away at their place. The applicant also delivers such prepared food and beverages to the customer at their home. We find that all such activities are covered under restaurant service and this view is bolstered by the clarification issued by CBIC vide Circular No. 164 /20 /2021-GST dated October 6, 2021. The relevant para 3.3 of the circular is reproduced as under:- 3.3 The explanatory notes to the classification of service state that 'restaurant service' includes services provided by Restaurants, Cafes and similar eating facilities including takeaway services, room services and door delivery of food. Therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refer to Explanation No. (iv)] 15.8 Thus, restaurant service is leviable tax rate of GST @ 5% (2.5% CGST +2.5% SGST) with no input tax credit as per Sr. No. 7(ii) of Notification No.11/2017 - Central Tax (Rate) dated June 28. 2017, read with Sr. No. 7(ii) of Notification No. 11/2017 - State Tax (Rate) dated June 30, 2017. 16. The applicant is also purchasing the food items from market and supply from the same premises over the counter. These food items are not prepared/cooked in the restaurant but purchased from the local market and directly supply to the customer in same premises. The customer may consume these food items at the restaurant or take away at their place. 16.1 The applicant has argued that the readily available food items not cooked/prepared in the restaurant premises sold over the counter from the restaurant also cover under 'restaurant service' and accordingly attract tax rate of GST. We in the above paras have already discussed that the supply of cooked foods and other food items in the restaurant are cover under 'restaurant service'. The supply of already cooked/prepared food items purchased from local market does not cover ..... X X X X Extracts X X X X X X X X Extracts X X X X
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