Supply of food by eating joints/central kitchen falls under ‘restaurant service’

In re Shrivika Foodcraft (Prop. Mrs. Richa Jalani) (GST AAR Rajasthan)

Supply of food by the entity partially or completely cooked in the central kitchen through or from the various eating joints would be covered by ‘restaurant service’ and the supply of all the items of food and beverages offered by the eating joints/central kitchen of applicant are classifiable under HSN 9963 under SI. No. 7(ii) of Notification No. 11/2017 – CT (Rate) dated 28.06.2017 as amended time to time and are taxable at the rate of 5% (without ITC).

Now, we are required to discuss the second question of the applicant which is related to the classification and applicable tax rate on the supply made by the applicant. In this regard, we are of the view that in the instant case supply made by the applicant is classifiable under Chapter, Section or Heading 9963 under SI. No. 7(ii) of Notification No. 11/2017 – CT (Rate) dated 28.06.2017 as amended time to time and is taxable at the rate of 5% (without ITC).

Now, we are required to discuss the Third & forth question of the applicant which is related to availability of Input Tax Credit (ITC) to the applicant if the supply considered as supply of goods or as supply of service. In this regard, we find that supply to be made by the applicant is covered under “restaurant service”, as defined in Notification No. 11/2017 – CT (Rate) dated 28.06.2017 as amended and attract 5% GST (2.5% CGST + 2.5% SGST) provided that credit of input tax charged on goods and services used in supplying the service has not been taken. The aforesaid notification is prescribing rate with specific condition, no option is provided. Wherever the intention to provide option is there, it is clearly mentioned by providing multiple rates ‘with ITC’ and ‘without ITC’. Thus, we find that applicant is not entitled to take ITC as per condition laid down at SI. No. 7(ii) of Notification No. 11/2017 – CT (Rate) dated 28.06.2017

FULL TEXT OF THE ORDER OF AUTHORITY FOR ADVANCE RULING, RAJASTHAN 

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