9911796707
TMI Blog2025 (2) TMI 129X X X X Extracts X X X X X X X X Extracts X X X X ..... ts are enumerated below for ease of reference: * the appellant is in restaurant business & is registered with the department; * they offer a variety of food items & beverages prepared at the restaurant as well as readily purchased for sale over the counter; * that there is no hotel accommodation; * the applicant is of the opinion that the food and beverages whether prepared and supplied whether consumed in the restaurant or supplied over the counter is leviable to 5% GST with no ITC; * the applicant is further of the opinion that the goods and beverages not prepared in the restaurant and supplied over the counter is also leviable to 5% GST with no ITC. 4. In view of the foregoing facts, the appellant had sought Advance Ruling on the following questions, viz: I. Whether the food & beverages prepared & supplied by the Applicant to its customers whether consumed in the restaurant or by way of takeaway qualifies as restaurant services' and is classifiable under SAC '996331: Services provided by restaurants, cafes and similar eating facilities including takeaway services, room services and door delivery of food' leviable to GST @5% with no input tax credit as per Sr. No. 7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom local market, by way of takeaway does not fall within the ambit of restaurant service' instead it is a supply of goods; * that in the AAAR ruling of Kundan Mishthan Bhandar, the appellate authority ruled that sale of sweets, namkeens cold drinks etc from sweetshop counter is supply of goods with applicable GST wherein ITC can be availed. The GAAR, vide the impugned ruling dated 18.10.2021, held as follows: RULING 1. The food and beverages prepared and supplied by the Applicant to its customers whether consumed in the restaurant or by way of takeaway qualifies as 'restaurant services' and is classifiable under SAC 996331: Services provided by restaurants, cafes and similar eating facilities including takeaway services, room services and door delivery of food leviable to GST @ 5% with no input tax credit as per Sr. No. 7(ii) of Notification No. 11/2017-Central Tax (Rate) dated June 28, 2017, read with Sr. No. 7(ii) of Notification No.11/2017 State Tax (Rate) dated June 30, 2017? 2. The readily available food and beverages (not prepared in the restaurant) sold over the counter by the Applicant is supply of goods which is liable to applicable rate of GST Tax and does not qu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay 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. Circular No. 164/20/2021-GST dated 6.10.2021 [relevant extracts] 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 f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 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." 3.2 Eating joint is a wide term which includes refreshment or eating stalls kiosks/ counters or restaurant at a cinema also. 3.3 The cinema operator may run these refreshment or eating stalls kiosks counters or restaurant themselves or they may give it on contract to a third party. The customer may like to avail the services supplied by these refreshment/snack counters or choose not to avail these services. Further, the cinema operator can also install vending machines, or supply any other recreational service such as through coin-operated machines etc. which a customer may or may not avail. 3.4 It is hereby clarified that supply of food or beverages in a cinema hall is taxable as restaurant service as long as: a) the food or beverages are supplied by way of or as part of a service, and b) supplied independent of the cinema exhibition service. 3.5 It is further clarified t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 'restaurant service'. We find that the ruling is in tune with the definition of restaurant service and the clarifications issued by the CBIC, as mentioned supra. We therefore, concur with the findings of the GAAR. 16. Lastly, the applicant has relied upon two rulings viz: [a] M/s. Kundan Misthan Bhandar 2019-VIL-24-AAAR. In this case, the AAAR of Uttarakhand, was dealing with a matter wherein the applicant was running a sweetshop and a restaurant, in two distinctly marked separate parts of the same premises in addition to maintaining separate accounts as well as separate billing; that the goods sold from sweetshop were billed exclusively as sweetshop sales whereas the goods supplied from restaurant were billed under restaurant services. IT was held that when the goods are supplied to customers in the restaurant or as a take aways from the restaurant counter it is a composite supply with restaurant service being the principal supply, since food is naturally bundled with the restaurant service. As is apparent, the facts of the case are not similar and hence, we do not find the reliance to the said ruling tenable. We further also disagree with the findings of the GAAR in para 17 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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