Classification of service— In the instant case, the applicant is looking forward to setup restaurants which will be offering various food items including cooked food, beverages and bakery items.
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.
This advance ruling is sought from the Authority for Advance Ruling in respect of the following question:-
– Whether the supply of food and beverages (as per illustrative list mentioned in Statement of Facts above) by the eating joints by way of following should be treated as supply of goods or supply of services?
- Dine In
- Take Away
- Delivery
– What should be the classification and applicable tax rate on the supply made by the applicant?
– If the supply shall be treated as supply of goods, whether Input Tax Credit will be available to the applicant?
– If the supply shall be treated as supply of services, whether Input Tax Credit will be available to the applicant?
Held that— In the present case, the supply will be treated as Supply of ‘restaurant service’ as per clause (b) of entry 6 of the Schedule II to section 7 of the CGST Act, 2017.
Supply made by the applicant are classifiable under Chapter, Section or Heading 9963 at 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).
As the supply in the instant case will be treated as Supply of ‘restaurant service’ as per clause (b) of entry 6 of the Schedule II to section 7 of the CGST Act, 2017 therefore, it will attract 5% GST (2.5% CGST + 2.5% SGST) provided that credit of input tax charged on goods and services used in supplying the service has not been taken.
As the supply in the instant case will be treated as Supply of ‘restaurant service’ as per clause (b) of entry 6 of the Schedule II to section 7 of the CGST Act, 2017 therefore, it will attract 5% GST (2.5% CGST + 2.5% SGST) provided that credit of input tax charged on goods and services used in supplying the service has not been taken.