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Readily available food & beverages, not prepared in restaurant and sold over the counter not qualify as 'restaurant services': AAR

Ridhi Enterprise, In re [2023] (AAR - Gujarat)

The applicant was engaged in restaurant business. It also purchased food items from local market and directly supply to customers in restaurant premises and customers may consume said food items at restaurant or take away. It filed an application for advance ruling to determine classification of both foods & beverages prepared in restaurant and readily available food items sold over the counter.

The Authority for Advance Ruling noted that food and beverages prepared/cooked in restaurant and supplied by applicant to its customers either consumed in restaurant or by way of takeaway would qualify as 'restaurant services'. However, supply of readily available food & beverages, not prepared in restaurant and sold over the counter would not qualify as 'restaurant services'. It was held that restaurant services would be classifiable under SAC 996331 and would attract 5% GST with no input tax credit as per Notification No. 11/2017-Central Tax (Rate). But, the readily available food and beverages (not prepared in restaurant) sold over the counter by applicant would be treated as supply of goods which shall be liable to applicable rate of GST for goods.

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Thanks

CA Rahul Gupta 

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