2023 (1) TMI 577 - AAR - GST

Scope of Advance Ruling application - Classification of supply - supply of goods or supply of services - rate of GST - supply of food and beverages by the eating joints - Dine In - Take Away - Delivery - HELD THAT - The applicant filed their application before the Rajasthan Authority for Advance Ruling (RAAR) on 17.03.20221.e. much later from the discharging his GST liability on restaurant services supplied by him. The clarification vides Circular No. 164 /20 /2021-GST dated 6.10.2021has already been issued by the Government and Notification No. 11/2017 - Central Tax (Rate) dated 28.06.2017 as amended is very much clear on the issue. The applicant is well awared about the notification and circular and discharging his tax liability in accordance to them - applicant motto is to find out whether the mechanism opted by him for payment of GST on said service is right or wrong, which is against the spirit of advance ruling. The scope of the ruling for Authority for Advance Ruling (AAR) is limited to the transactions being undertaken or proposed to be undertaken on the matters which are not sorted out - In the instant case, the application seeking advance ruling was filed on 17.03.2022 before the RAAR with respect to supplies already being undertaken, GST being paid and GST returns has been submitted. Hence, the case is out of the purview of the Advance Ruling.

Issues Involved:
1. Classification of goods or services.
2. Admissibility of input tax credit of tax paid or deemed to have been paid.

Detailed Analysis:

1. Classification of Goods or Services:
The applicant, a chain of restaurants, sought clarification on whether the supply of food and beverages through dine-in, take-away, and delivery should be treated as a supply of goods or services. The applicant argued that their services fall under "restaurant service" as per Entry 6(b) of Schedule II and should be treated as supplies of services. They referenced Notification No. 11/2017 - Central Tax (Rate) and Circular No. 164/20/2021-GST, which clarified that services provided by cloud kitchens/central kitchens are covered under "restaurant service" and attract 5% GST without ITC.

2. Admissibility of Input Tax Credit (ITC):
The applicant inquired whether ITC would be available if the supply is treated as a supply of goods or services. The jurisdictional officer commented that the supply of food by the entity, whether partially or completely cooked in the central kitchen, through various eating joints, would be covered by 'restaurant service' and classifiable under HSN 9963. This classification attracts a tax rate of 5% (without ITC) as per Notification No. 11/2017-CT (Rate).

Findings, Analysis & Conclusion:

1. The Authority for Advance Ruling (AAR) examined the records and submissions. The applicant's question of law was whether the supply of food and beverages should be treated as a supply of goods or services and the applicable tax rate.

2. The AAR noted that the applicant's application for advance ruling was filed on 17.03.2022, while the supply, payment of GST, and submission of GST returns had already been taking place. The AAR emphasized that advance rulings are meant to provide certainty on tax liability in advance for future activities, not for transactions where GST is already being paid.

3. The AAR highlighted that the purpose of advance rulings is to provide clarity on tax liability for proposed transactions and help in planning GST liability. Since the applicant was already discharging GST liability as per existing notifications and circulars, the application was beyond the purview of advance ruling.

4. The AAR concluded that the applicant's intention was to validate the mechanism opted for GST payment, which is against the spirit of advance ruling.

Ruling:
The application for advance ruling was deemed not maintainable and was rejected under the provisions of the GST Act, 2017, as it pertained to transactions where GST was already being paid and returns were submitted.

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