Pure food items will also attract 5% GST
Pure food items will also attract 5% GST:
Pure food items will also attract 5% GST if they are supplied from a premises also have restaurant. Observed in a recent ruling of M/S. KUNDAN MISTHAN BHANDAR ,AAR Ruling No. 09/2018-19 in Application No. 08/2018-19.The question asked from the authority was:
(a) whether supply of pure food items such as sweetmeats, namkeens, cold drink and other edible items from sweetshop which also runs a restaurant is a transaction of supply of goods or a supply of service;
(b) what is the nature and rate of tax applicable to the following items supplied from ground floor of a sweetshop in which restaurant is also located on the first floor and whether the applicant is entitled to claim benefit of input tax credit with respect to the same.
Which were answered as followed by the Authority:
(i) The supply shall be treated as supply of service and sweet shop shall be treated as extension of restaurant;
(ii) The rate of GST on aforesaid activity will be 5% as on date, on the condition that credit of input tax charged on goods and services used in supplying the said service has not been taken;
(iii) All the items including takeaway items from the said premises shall attract GST of 5% 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.
This is very important observation. It is relevant for all premises engaged in providing food selling along with food serving. All items sold from such premises will be a supply of service falling in para 6b of schedule II. The tax rate applicable on those food articles will be 5% without ITC.
Many restaurants sell food articles like cake, pastries, col drinks etc. Tax rate on these articles is high in comparison to restaurant services. Earlier there was a dilemma in regard of taxability of those food articles. Even if a customer is not sitting to eat and order only food items, tax rate will be 5%.
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