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TMI Blog2019 (10) TMI 866X X X X Extracts X X X X X X X X Extracts X X X X ..... undled - Since the supplies made by the applicant in IBACO outlets involve both supplies of goods and services, with one of them as principal supply, the same has to be considered as a composite supply. The composite supply of goods being food or any other article for human consumption or any drink, where supply or service is for a consideration, then such composite supply shall be treated as a supply of services. Since the applicant is supplying ice creams, which are items for human consumption, by way of or as part of any service or in any other manner, the composite supply has to be treated as a supply of services. The applicant is supplying items of food as a part of service and since the provision of eating in the premises is provided or the customers may take the same away from the applicant s place, the transactions under question are covered under the amended provision of Entry 7(i) of Notification No. 11/2017- Central Tax (Rate) dated 28.06.2017 as amended by Notification No.46/2017 - Central Tax (Rate) dated 14.11.2017 and attracts a tax of 2.5% without any input tax credit. - KAR ADRG 68/2019 - - - Dated:- 21-9-2019 - SRI. HARISH DHARNIA, AND DR. RAVI PRASAD M. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A in Cattle Feed and OYALO in Pizza, and all their brands are leading brands in South India and enjoy continued patronage from the customers for more than three decades. b. The applicant states that IBACO is one of the premium brands of the applicant in their Ice Cream segment and has been in existence since 2012. IBACO has its presence in various States. It offers wide range of exotic ice cream flavours. c. The applicant further submits that IBACO outlets are air conditioned. In these outlets the applicant ensures proper festive ambience to the customers. Here the ice creams are not sold as such in packaged condition, instead ice cream is prepared depending on the choice of the customer with the ice creams and toppings available in the outlet. Further, ice cream cakes and chocolates are packed as per the choice of the customer. d. The applicant submits that the customer has the option to choose from various combinations and toppings such as chocolate buttons, chocolate sauce, chocolate fudge, assorted nuts, strawberry sauce, roasted badam nuts, dark cherry, mango chunks, waffle fan, etc. available in the outlet. The applicant also submits that IBACO offers ice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with various varieties of ice creams, chocolates, ice cream cakes and Pizza cakes with name tags giving details of flavours like chocolate, Vanilla, Butterscotch among various other flavours. Based on the said options, the customer shall be at the liberty of choosing various combinations as they feel free. Apart from the cakes displayed in freezer, IBACO outlets also undertake to supply custom made artisan cakes. b. The customer is free to have the taste of ice creams of his choice for selecting his order. After tasting, the customer shall decide on the choice of ice cream and then place the order. The said choices would be served by the IBACO outlet to the customer in cup/ cone or bar depending on the choice of the customer. c. Now the customer moves to the toppings section, wherein the customer is greeted with various choices like chocolate buttons, chocolate sauce, chocolate fudge, assorted nuts, strawberry sauce, etc. Based on the choices, the customer decides the combination. d. Once the final combination is ready, the combination is weighed and the customer is billed on total weight of the ice cream along with the toppings selected by the customer. Based on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... finition of composite supply to ascertain whether the said supplies would qualify as composition supplies in the table given below: S.No. Condition for composite supply IBACO business model Fulfilment of condition 1 Supply consists of two or more taxable supplies Supplies made by IBACO as brought out above are all taxable supplies. Also two or more supplies are involved in supply of ice cream and cakes Fulfilled 2 Supplies should be naturally bundled and in conjunction with each other Mixing of toppings with ice cream to give it a new flavour is the uniqueness of IBACO. Services such as mixing of ice creams and toppings, providing seating facility etc., are in connection with the supply of ice cream. Such services will not exist if there is no supply of ice cream. The said services are connected to and dependent on supply of ice cream. Its dependency proves that such services are naturally bundled with supply of ice cream. Similar analogy applies for supply of chocolates and cakes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... charged on goods and services used in supplying the service has not been taken. Therefore, with effect from 15th November, 2017, the applicant has the option to levy GST rate of 5% on its ice cream and cake supplies provided it does not avail any input tax credit on goods and services. 6. FINDINGS DISCUSSION: We have considered the submissions made by the applicant in their application for advance ruling as well as the additional submissions made by Sri. Harish, Advocate, during the personal hearing. We also considered the issues involved on which advance ruling is sought by the applicant and relevant facts. At the outset, we would like to state that the provisions of both the CGST Act and the KGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provisions under the KGST Act. 6.1 The transaction of the applicant is examined and found that the applicant is supplying ice cream and other items of food which are made to order along with certain services. Hence the applicant is supplying both services and goods and they are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cle for human consumption or drink is supplied, other than those located in the premises of hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes having declared tariff of any unit of accommodation of seven thousand five hundred rupees and above per unit per day or equivalent. Explanation .- declared tariff includes charges for all amenities provided in the unit of accommodation (given on rent for stay) like furniture, air conditioner, refrigerators or any other amenities, but without excluding any discount offered on the published charges for such unit. 2.5 Provided that credit of input tax charged on goods and services used in supplying the service has not been taken [please refer to Explanation No.(iv)] The Explanation (iv) to the Notification states as under: (iv) Wherever a rate has been prescribed in this notification subject to the condition that credit of input tax charged on goods or services used in supplying the service has not been taken, it shall mean that,- (a) Credit of input tax charged on goods or services used exclusively in supplying suc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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