Bikanervala Foods Pvt. Ltd. Vs Commissioner of CGST (CESTAT Delhi)
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Delhi bench, has ruled that the sale of food items by way of “Take-Away” and “Home Delivery” from restaurants does not attract service tax under the category of ‘Restaurant Service’. The tribunal set aside a service tax demand confirmed against Bikanervala Foods Pvt. Ltd. on this issue.
The case involved Bikanervala Foods, which is registered for various services, including ‘Restaurant Service’. An audit observed that the company had claimed exemption on sales made through “Take Away” and “Home Delivery” from its air-conditioned restaurants during the financial years 2013-14 and 2014-15.
The department subsequently issued a show cause notice in January 2017, demanding service tax on these sales, treating them as taxable restaurant services. The demand was confirmed by the adjudicating authority and upheld by the Commissioner (Appeals).
Bikanervala Foods challenged this, arguing that “Take Away” and “Home Delivery” transactions constitute a pure sale of goods and do not involve the service element inherent in traditional restaurant dining.
The CESTAT, after hearing both sides, found that the issue was no longer unsettled, citing previous judgments. The tribunal relied heavily on its own decision in the case of Haldiram Marketing Pvt. Ltd. Vs. Commissioner of CGST, GST, Delhi East Commissionerate, which involved identical facts. In the Haldiram case, the tribunal had held that “Take Away” of food items amounts to a sale and does not involve any element of service.
