Pure food Items supplied by Sweetshop-cum-Restaurant treated as Supply of Service: AAR [Read Order]

The Authority for Advance Ruling ( AAR ), Uttarakhand has held that the pure food items supplied by a sweetshop-cum-restaurant treated as supply of service under the GST regime.

In case of sweet shop cum restaurant, services from restaurant is a principle supply which provides a bundled supply of preparation and sale of food and serving same and, therefore, it constitutes a composite supply

The applicant has a sweet shop in ground floor and a restaurant in first floor of same building. The applicant sought for an advance ruling on the nature of supply and the tax liability of the same under GST.

The authority noted that the activity of the applicant come under the purview of “restaurant services“.

The authority said that the supply shall be treated as supply of service and sweet shop shall be treated as extension of restaurant and activity of applicant would come under purview of ‘restaurant services’ falling under Heading 9963 attracting GST @ 5% and applicant cannot avail credit on GST paid on goods and services used in its said activity in terms of Notification No. 11/2017-Central Rate (Tax), dated 28-6-2017.

It was also clarified that all the items including takeaway items from the said premises shall attract GST of 5%o as on date subject to the condition of non-availment of credit of input tax charged on goods and services used in supplying the said service.