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No option to Restaurants to pay GST @ 18% with input tax credit
Case Law Details
- Case Name
- In re Coffee Day Global Limited (GST AAR Karnataka)
- Appeal Number
- Only available for paid members
- Date of Judgement/Order
- Only available for paid members
- Courts
- AAR Karnataka, Advance Rulings
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In re Coffee Day Global Limited (GST AAR Karnataka)
The Applicant is in the business of running restaurants under the name and style of Café Coffee Day where non-alcoholic beverages and food items are served. Notification No.46/2017 dated 14.11.2017 provides that restaurants can pay GST @5% (CGST-2.5% and SGST-2.5%), provided they do not avail input tax credit of the tax paid on input goods and services. Notification No.11/2017 dated 28.06.2017, at Sl.No.35, provides for levy of GST @18% (CGST-9% & SGST-9%) on supply of unclassified services and the suppliers are entitled to take input ta...
This kind of ruling given by the Authority places Restaurants in a peculiar situation. While hotels under 5* category charge effective tax of 18% on F & B services , availing input credit which is justified, they cannot differentiate between services rendered in F & B unlike Cafe Coffee Day whose services can be classified as ruled. Ruling appears an omnibus one with Authorities likely to take a cue and slap notices on all .