Pre-packaged Food Sales Without Service Elements Not Eligible for Restaurant Service GST Rate Under SAC 996331

The AAAR determined that sale of readily available food and beverages not prepared in restaurant premises, whether consumed on-site or taken away, does not constitute 'restaurant service' under SAC 996331. The ruling established that restaurant service requires a composite supply where food/beverage provision is bundled with service elements. The authority emphasized that per Schedule-II clause 6(b) read with Section 7(1A), mere sale of pre-packaged food items without accompanying services represents pure supply of goods, not restaurant service. Consequently, such transactions attract applicable GST rates for goods rather than the concessional rate available for restaurant services under Notification No. 11/2017-Central Tax (Rate) and corresponding State notifications. .....

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