Classification of service— In the instant case, 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 purchased food and beverage sold over the counter. 

The applicant standalone restaurants exclusively serving food and beverages and are not hotel accommodation.

The Applicant submits that they procure the requisite raw materials, services etc. to prepare the food items and beverages in the restaurant's kitchen. The customers visit the Applicant's restaurant, order the food/beverage preparation they want and then consume the same at the restaurants. The customers can also choose to take away the food items or beverages of their choice and consume them elsewhere. It is worth noting that the element of service i.e. the customers using the restaurant's infrastructure to consume the food or beverages is included in the pricing of the prepared food and beverages irrespective of whether the customer chooses to consume the product within the restaurant premises or takes it away for consumption elsewhere.

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 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?

The main point here is to decide the Tax Rate of GST on both types of supply which are happened from the restaurant.

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. 

This authority hold 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.

Held that— 

1. 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?

2. 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'.