GST – AAR Gujarat: Food and beverages prepared and supplied to customers whether consumed in the restaurant or by way of takeaway qualifies as 'restaurant services, taxable @5% GST without ITC; Readily available food and beverages (not prepared in the restaurant) sold over the counter does not qualify as 'restaurant services', taxable as per GST rate of supply of goods [Order attached]
Order Date – 30 December 2022
- The Applicant, M/s. Ridhi Enterprise, is in the restaurant business which offers a variety of food items including food and beverages prepared at the restaurant as well readily purchased food and beverage sold over the counter. The applicant standalone restaurants exclusively serving food and beverages and are not hotel accommodation.
- 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?
- The AAR observed that as per the definition of "restaurant service" in Notification No. 11/2017-CT (Rate) dated 28-6-2017 and Circular No. 164/20/2021-GST dated October 6,2021 clarified that the service by an entity, by way of cooking and supply food by way of takeaway or door delivery or through or from any covered by restaurant service.
- Thus it was held that the food and beverages prepared/cooked in the restaurant and supplied by the Applicant to its customers either consumed in the restaurant or by way of take away qualifies as restaurant services. The restaurant service is classifiable under SAC 996331.
- Restaurant service is leviable tax rate of GST @ 5% (2.5% CGST +2.5oh SGST) with no input tax credit as per Sr. No. 7(ii) of Notification No.lll20l7 – 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 AAR held that 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.