9911796707
TMI Blog2022 (2) TMI 1212X X X X Extracts X X X X X X X X Extracts X X X X ..... l Lines, Jaipur, Rajasthan, 302006(hereinafter the Applicant) is fit to pronounce advance ruling as it falls under the ambit of the Section 97(2) (a) & (d)given as under:- (a) Classification of any goods or services or both; and (d) Admissibility of input tax credit of tax paid or deemed to have been paid Further, the applicant being a registered person (GSTIN is 08BGKPM6084K2ZQ) as per the declaration given by him in Form (ARA-01) the issue raised by the applicant is neither pending for proceedings nor proceedings were passed by any authority. Based on the above observations, the applicant is admitted to pronounce advance ruling. A- SUBMISSION OF THE APPLICANT:(in brief) * M/s Shrivika Foodcraft (hereinafter referred to as "applicant") is looking forward to setup restaurants which will be offering various food items including cooked food, beverages and bakery items. The applicant will obtain a license from FSSAI under the Business Category "Food Services -Restaurants". The applicant is registered under GST having GSTIN 08BGKPM6084K.2ZQ in the state of Rajasthan. * The major food items offered by the applicant in their menu will be as follows: * The applicant will have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvices through following methods: S.No. Item Name 1. Sandwiches / Burgers / Wraps /Continental Food 2. Salads / Indian Food 3. Milk Based Shakes / Beverages 4. Non Milk Based Beverages 5. Brownie 6. Cakes / Pastries 9. Bread/Pizza base/ Bun / Pav 7. Cookies / Rusk 8. Foxnut/Nachos a. Dine In: Applicant will be providing Casual Dining facility to its customers. Dine In is the category where customers' will visit to the eating joint, have an access to look around the displayed food items available and the complete menu and choose to sit and consume it within the restaurant premises. Under this category, customers will be using the restaurant infrastructure for the consumption of food. b. Take Away: Under this method, customers can visit to the eating joint, avail of the infrastructure facilities, look around for the entire display of food items and complete menu available and opts to get the food packed for consume later at desired location as per their own convenience. c. Delivery (Own or through Food Delivery Apps): Under this category, the customers are provided with a facility to place their orders over call, Whatsapp, Swiggy, Zomato or through any o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es services provided by Restaurants, Cafes and similar eating facilities including takeaway services, room services and door delivery of food. Therefore, it is clear that takeaway services and door delivery services for consumption of food are also considered as restaurant service and, accordingly, service by an entity, by way of cooking and supply food, even if it is exclusively by way of takeaway or door delivery or through or from any restaurant would be covered by restaurant service. This would thus cover services provided by cloud kitchens/central kitchens. 3.4 Accordingly, as recommended by the Council, it is clarified that service provided by way of cooking and supply of food, by cloud kitchens central kitchens are covered under "restaurant service" as defined in notification No. 11/2017- Central Tax (Rate) and attract 5% GST [without ITC]" * That on above case also it has been clearly mentioned that service by an entity, by way of cooking and supply of food, even if it is exclusively by way of takeaway or door delivery or through or from any restaurant would be covered by restaurant service. In case of applicant since cooking shall be done by the applicant only (partial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax charged on goods and services used in supplying the service has not been taken [Please refer to Explanation (iv)] (v) Composite supply of 'outdoor catering ' together with renting of premises (including hotel, convention center, club, pandal, shamiana or any other place, specially arranged for organising a function) at premises other than 'specified premises ' provided by any person other than,- (a) suppliers providing 'hotel accommodation ' at "specified premises ', or (b) suppliers located in 'specified premises'. 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 (iv)] (vi) Accommodation, food and beverage services other than (i) to (v) above Explanation.- (a) For the removal of doubt, it is hereby clarified that, supplies covered by items (ii), (iii), (iv) and (v) in column (3) shall attract central tax prescribed against them in column (4) subject to conditions specified against them in column (5), which is a mandatory rate and shall not be levied at the rate as specified under this entry. (b) This ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... joints are evenly offered for all the customers and there is no separate demarcation of area in the premises of the eating joint for customer taking the services by the different methods be it Dine In, Take Away or Delivery. The kitchen area is common for all the orders; the staff is commonly handling the orders whether to serve in the premises or to serve for consumption away from the premises as per the desire of the customer. The display of food items is also common for service by any of the methods. There is a common billing counter for all the orders and no separate billing mechanism for the orders to be served on the table or to be consumed outside. * Hence Entry No. 7(ii) of the Tariff Notification for services read with the definition of "restaurant service" in the said notification under clause (xxxii) of the Explanation appears to cover the supply of all items of food and beverages made by the applicant. EXEMPTIONS / CHANGES IN GST RATES / ITC ELIGIBILITY CRITERIA All stand-alone restaurants irrespective of air conditioned or otherwise, will attract 5% GST without ITC. Food parcels (or takeaways) will also attract 5% GST without ITC. * Further, the above entry 7(ii ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n that the supply of food by the entity partially or completely cooked in the central kitchen through or from the various eating joints would be covered by 'restaurant service'. * Hence in view of the applicant, the supply of all the items of food and beverages offered by the eating joints of appellant are classifiable under HSN 9963 under SI. No. 7(ii) of Notification No. 11/2017 - CT (Rate) dated 28.06.2017 amended as on date and are taxable at the rate of 5%. * That further in the said entry in SI. No. 7(ii), a condition has been mentioned in the Notification that credit of input tax charged on goods and services used in supplying the service has not been taken. Further, in the residual entry of SI. No. 7 it is clarified for the removal of doubt that supplies covered by items (ii) shall attract central tax at the rate of 5% subject to condition that credit has not been taken, which is a mandatory rate and tax at 18% in residual entry shall not be levied. Hence on basis of above, applicant is of the view that ITC will not be available. B. Question(s) on which advance ruling is sought - Whether the supply of food and beverages (as per illustrative list mentioned in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntinental Food 2. Salads / Indian Food 3. Milk Based Shakes / Beverages 4. Non Milk Based Beverages 5. Brownie 6. Cakes / Pastries 9. Bread/Pizza base/ Bun / Pav 7. Cookies / Rusk 8. Foxnut/Nachos As per facts laid down in their written submission, 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. A substantial part of cooking process of majority food items will be carried out at the central kitchen and the eating joints will receive the pre-cooked or semi-cooked preparations from the kitchen in different forms, containers or packaging having a shelf life as applicable for the food item. The preparations may be sent to the outlets in packed form to be offered to the customers as such or to be further processed for offering the food items or dishes at the choice and desire of consumers. In view of above facts, we are of the view that activity of sale of aforementioned food items alongwith services thereof to be performed by the appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and services used in supplying the service has not been taken [Please refer to Explanation (iv)] (v) Composite supply of 'outdoor catering' together with renting of premises (including hotel, convention center, club, pandal, shamiana or any other place, specially arranged for organising a function) at premises other than 'specified premises' provided by any person other than- (a) suppliers providing 'hotel accommodation' at 'specified premises', or (b) suppliers located in 'specified premises'. 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 (iv)] (vi) Accommodation, food and beverage services other than (i) to (v) above Explanation: (a) for the removal of doubt, it is hereby clarified that, supplies covered by items (ii), (iii), (iv) and (v) in column (3) shall attract central tax prescribed against them in column (4) subject to conditions specified against them in column (5), which is a mandatory rate and shall not be levied at the rate as specified under this entry. (b) This entry covers supply of ' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rence:- "3. Services by cloud kitchens/central kitchens: 3. 1 Representations have been received requesting for clarification regarding the classification and rate of GST on services rendered by Cloud kitchen or Central Kitchen. 3.2 The word "restaurant service" is defined in Notification No. 11/2017 -CTR as below: - "Restaurant service" means supply, by way of or as part of any service, of goods, being food or any other article for human consumption or any drink, provided by a restaurant, eating joint including mess, canteen, whether for consumption on or away from the premises where such food or any other article for human consumption or drink is supplied." 3.3 The explanatory notes to the classification of service state that "restaurant service" includes services provided by Restaurants. Cafes and similar eating facilities including takeaway services, room services and door delivery' of food. Therefore, it is dear that takeaway services and door delivery services for consumption of food are also considered as restaurant service and, accordingly, service by an entity, by way of cooking and supply of food, even if it is exclusively by way of takeaway or door delivery ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion to provide option is there, it is clearly mentioned by providing multiple rates 'with ITC' and 'without ITC'. Thus, we find that applicant is not entitled to take ITC as per condition laid down at SI. No. 7(ii) of Notification No. 11/2017 - CT (Rate) dated 28.06.2017. 4. In view of the foregoing, we rule as follows: - RULING Q. 1: 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? o Dine In o Take Away o Delivery Ans.1: 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. Q.2: What should be the classification and applicable tax rale on the supply made by the applicant? Ans.2: 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). Q.3: It the supply shall be treated as supply of goods, whether Input Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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