9911796707
TMI Blog2020 (6) TMI 815X X X X Extracts X X X X X X X X Extracts X X X X ..... discussed, Composite supply is ore where two or more goods or services or both are together, in a natural bundle and in a normal course of business, provided one of which is a principal supply. However, principal supply will be that supply which is predominant over other supplies - in order to identify -if the particular supply is a Mixed Supply, the first requisite is to rule out that the supply is a composite supply. A supply can be a mixed supply only if it is not a composite supply. As a corollary it can be said that if the transaction consists of supplies not naturally' bundled in the ordinary course of business then it would be a mixed Supply. Once the amenability of the transaction as a composite supply is ruled out, it would be mixed supply, classified in terms of a supply of goods or services attracting highest rate of tax. The activity of the applicant from their restaurant comes under the purview of restaurant services , falling under Heading 9963 leviable to GST rates on services as stipulated under Notification No. 11/2017-Central Rate (Tax) dated 28.06.2017 (as amended time to time) - the rate of GST on activity shall be 5% as on date. Input tax credit - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of supply of pure food items from sweetshop who is also running a restaurant is a transaction of supply of goods or a supply of service, on the nature and rate of tax applicable on the consumable items supplied form ground floor of a sweetshop/restaurant and regarding entitlement of benefit of input tax credit with respect to the above supplies. 2. Facts of the case:- (i) M/s Gangaur Sweets, Raigarh, Chhattisgarh [hereinafter also referred to as the applicant] is primarily engaged in the business of supplying goods services both. (ii) List of items supplied from a sweetshop restaurant are sweetmeats, namkeens, Dhokla, Paneer Khoa, cold drinks, ice creams, chocolates bakery items and other edible items. (iii) that, at present the applicant has opted for composition levy. (iv) that, the applicant is primarily engaged in the business of supplying goods and services both and seeks an advance ruling on the following questions / issues as under: (a) whether the supply of pure food items such as sweetmeats, namkeens, cold drink and other edible items from sweetshop which also runs a restaurant is a transaction of supply of goods or a supply of service; (b) what ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es of goods of services or combination of goods and services are classified, with distinct characteristics, as: i. Composite Supply ii. Mixed Supply composite supply means a supply made by a taxable person to a recipients consisting of two or more taxable supplies of goods or services or both or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business one of which is a principal supply ; mixed supply means two or more individual supplies of goods or services, or any combination thereof, made in conjunction with each other by a taxable person for a single price where such supply does not constitute a composite supply; principal supply means the supply of goods or services which constitute the predominant element of a composite supply and to which any other supply forming part of that composite supply is ancillary; (1) That, as per the applicant interpretation of law sale of sweets, namkeens, cold drinks other edible items through restaurants can be treated as composite supply with restaurant supply being the principal service. (2) That, sale of sweets, namkeens, cold drink ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us, 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 CGGST Act, 2017. Now we sequentially proceed to discuss the issues involved in the ruling so sought by the applicant and the law as applicable in the present case. The applicant sought advance ruling to the points as under:- 6.1- whether the supply of pure food items such as sweetmeats, namkeens, cold drink and other edible items from sweetshop which also runs a restaurant is a transaction of supply of goods or a supply of service; 6.2.- what is the nature and rate of tax applicable to the following items supplied from ground floor of a sweetshop in which restaurant is also located on the first floor and whether the applicant is entitled to claim benefit of input tax credit with respect to the same: (i) Sweetmeats, namkeens. Dhokla, Paneer, Khoa etc. commonly known as snacks, cold drinks, ice creams, chocolates, bakery items, mouth fresheners and other edible items; (ii) Ready to eat (partially or fully pre-cooked/packed)items supplied from live counters such as jalebi, cholabhatura and other edible items; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mbination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business one of which is principal supply; (52) goods means every kind of movable property other than money and securities but includes actionable claim, growing crops, grass and things attached to or forming port of the land which are agreed to be severed before supply or under a contract of supply; (74) mixed supply means two or more individual supplies of goods or services, or any combination thereof, made in conjunction with each other by a taxable person for a single price where such supply does not constitute a composite supply; (90) principal supply means the supply of goods or services which constitutes the predominant element of a composite supply and io which any other supply forming part of that composite supply is ancillary; (102) services means anything other than goods, money and securities but includes activities relating to the use of money or its conversion by cash or by any either mode, from one form, currency or denomination, io another form; currency or denomination for which a separate consideration is charged; 7.1 As alrea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... restaurant there being supply or preparation and sale of food and serving the same there exist (i) Supply of two or more goods or services or both together (ii) Goods or services or both are usually provided together in the normal course of business, having all the ingredients of a composite supply. In this regard Schedule II of the Act ibid and the relevant portion of the same read as under: SCHEDULE II [See section 7] ACTIVITIES TO BE TREATED AS SUPPLY OF GOODS OR SUPPLY OF SERVICES 6. Composite supply The following composite supplies shall be treated as a supply of services, namely:- (a) (b) supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (other than alcoholic liquor for human consumption), where such supply or service is for cash, deferred payment or other valuable consideration. 7.3 On the basis of evidences as forthcoming from the applicant it is quite evident that the activity of the applicant from their restaurant comes under the purview of restaurant services , falling under Heading 9963 leviable to GST rates on services as st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncipal supply, since supply of food in this case is naturally bundled with the restaurant service. The taxability of all such goods supplied to or through the restaurant will be governed by the principal service i.e. restaurant service and GST rate with applicable conditions will also be applicable to all such goods also. Input credit will not be allowed in such a case. However in case where goods are supplied to customers through sweetshop counter having no direct or indirect nexus with restaurant service i.e. any stand alone customer who visit such sweet shop exclusively for purchase of any item of any quantity across the counter without visiting the restaurant, the billings of such sales are also done separately, such exclusive sales to such exclusive stand alone customer across the counter cannot be clubbed with restaurant service, it being an exclusive transaction of supply of goods independent of restaurant service. These sales do not satisfy the basic requirement of a composite supply i.e. 'these cannot be treated as' being naturally bundled and supplied in conjunction with each other'. Such across the counter soles [rom sweetshop definitely requires dissimi ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
