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TMI Blog2023 (3) TMI 54X X X X Extracts X X X X X X X X Extracts X X X X ..... s [a manufactured item] and not as a service, even if certain ingredients of service are present. Ice cream sold by the outlets of the applicant are already manufactured ice-cream; that it is not their case that the ice cream were manufactured/cooked/prepared by them; that the applicant is on record that their ice cream division was sold way back in the year 2017 therefore ice cream sold by the applicant s outlet would not fall within the ambit of restaurant service and is supply of goods and hence would attract GST at the rate of 18%. When an ice cream is ordered as a desert along with cooked or prepared food at their outlets - whether it would be treated as supply of goods or supply of services? - HELD THAT:- Under GST, a composite supply mean a supply made by a taxable person to a recipient 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. Here, principal supply means supply of goods or service which constitutes the predominant element of a composite supply and to which any o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntiation in the items being served at such outlets; that the outlets have similar menu irrespective of whether there is proper seating arrangement or otherwise; that though ice cream, preparation are sold/served, the sales mix is having significant share of food and beverages as compared to ice cream. 5. As far as Huber and Holly is concerned, the activities include: it is a premium category fast food restaurant wherein pizza, pasta, sandwiches, ice cream sundaes, ice cream pastry etc are served; the customer can have dine in experience or can also order food online or takeaway; the outlets have seating capacity with air conditioning where food/ice cream or both is served as per the desire of the customer. 6. Now, ice creams as is evident are also served at these outlets. These ice creams include MRP products/pre-packaged products as well as non MRP products. They are served/packed there and then. 7. The applicant has further given the following difference between an ice cream parlour and restaurant/eating joint viz: Sr.No. Ice Cream parlour Restaurant / eating joint ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the facts as stated in the application. Discussion and findings 11. At the outset, we would like to state that the provisions of both the CGST Act and the GGST 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 GGST Act. 12. We have considered the submissions made by the Applicant in their application for advance ruling as well as the submissions made during the course of personal hearing. We have also considered the issue involved, the relevant facts the applicant s submission/interpretation of law in respect of question on which the advance ruling is sought. 13. The applicant is engaged in the restaurant business and the format of the outlets is mentioned in detail supra. The ice cream division has been sold. The present outlets are broadly of the three types, wherein the applicant is supplying food which is prepared and cooked in the restaurant/eatery in addition to supplying the ice creams, which are not prepared/produced by them. The main question to be decided is whether the supply of ice cre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [amending notification No. 11/2017-C.T. (Rate)] In exercise of the powers conferred by sub-sections (1), (3) and (4) of section 9, sub-section (1) of section 11, sub-section (5) of section 15, sub-section (1) of section 16 and section 148 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on the recommendations of the Council, and on being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendments in the notification of the Government of India, in the Ministry of Finance (Department of Revenue) No. 11/2017-Central Tax (Rate), dated the 28th June, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 690(E), dated the 28th June, 2017, namely :- In the said notification, - (i) in the Table, - (a) against serial number 7, for the entries relating thereto in column (3), (4) and (5), the following items and entries shall be substituted, namely:- (3) (4) (5) (ii) Supply of restaurant service other than at specified premises ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, to the effect that service provided by any entity, which is engaged in cooking and supply of food would be covered within the ambit of restaurant service . 17. It is in this background, that we would like to examine the question raised by the applicant as to whether supply of ice cream from any of the outlets of the applicant would be considered as supply of restaurant services or not. We have already dealt with the form of outlets of the applicant in detail. For the sake of brevity, we do not intent to repeat it. 18. We find that the circular No. 164/20/2021-GST dated 6.10.2021, has also further covered the supply of ice cream by ice cream parlours. The relevant extract is reproduced below for ease of reference viz 4. Supply of ice cream by ice cream parlours 4.1 Representations have been received requesting for clarification regarding the supplies provided in an ice cream outlet 4.2 Ice cream parlours sell already manufactured ice-cream and they do not have a character of a restaurant. Ice-cream parlours do not engage in any form of cooking at any stage, whereas, restaurant service involves the aspect of cooking/preparing during the course of providi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... food items [not prepared, cooked in the restaurant] sold over the counter by the applicant through their outlets to the customer whether consumed in the outlets/restaurant or by way of takeaway, does not qualify as restaurant services and is a supply of goods. 21. In view of the foregoing, we hold that the outlets of the applicant selling already manufactured ice-cream, do not engage in any form of cooking. As already discussed above, restaurant service involves the aspect of cooking/preparing during the course of providing service. Hence, as recommended by the Council, supply of ice-cream [not prepared, cooked] by the outlets of the applicant, stands on a different footing than restaurant service. Further, their activity entails supply of ice cream as goods [a manufactured item] and not as a service, even if certain ingredients of service are present. Thus we hold that ice cream sold by the outlets of the applicant are already manufactured ice-cream; that it is not their case that the ice cream were manufactured/cooked/prepared by them; that the applicant is on record that their ice cream division was sold way back in the year 2017 therefore we hold that ice cream ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he highest rate of tax. 24. Now, when an ice cream is ordered as a desert along with cooked or prepared food at their outlets, the question that arises is whether it would be treated as supply of goods or supply of services. Under GST, a composite supply mean a supply made by a taxable person to a recipient 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. Here, principal supply means supply of goods or service which constitutes the predominant element of a composite supply and to which any other supply forming part of that composite supply is ancillary. Likewise, a 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. 25. GST Flyer on Composite Supply Mixed Supply states that the test of whether a service is bundled or not in the ordinary course of business would depend upon the normal or frequent pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dvance Ruling [Order No. 2/DAAAR/2022-23/2005-2010 dtd 23.5.2022]. However, on going through the ruling we observe that M/s. Deepak and Company, the applicant was engaged in supply of food through food plaza on railway platform, on board Rajdhani trains and mail and express trains. We further observe that the ruling was based on a clarification issued by CBIC vide F. No. 354/2/2018-TRU which was specifically in terms of a clarification sought by Railways. Facts being different, the ruling is not applicable to the present facts of the applicant. 28. In the light of the foregoing, we rule as under: RULING 1. The supply of ice cream from the outlets of the applicant cannot be considered as supply of restaurant services . The readily available ice creams [not prepared in their outlets] sold over the counter is supply of goods. However, an ice cream when ordered and supplied along with cooked or prepared food, through their outlets would assume the character of composite supply, wherein the prepared food being the principal supply and hence qualifies as restaurant services . 2. The supply of ice cream from the outlets of the applicant is not classified as restaurant s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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