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All restaurant services attract 5 per cent GST:
Authority for Advance Ruling
A recent ruling by the GST Authority for Advance
Rulings’ (AAR) Gujarat unit stated that close to five
per cent rate will be applicable for dining in,
takeaways and even doorstep deliveries by stand-alone
restaurants, said a TOI report.
According to the report,
the authority stated, “Irrespective of whether customers
of Riddhi Enterprises (the applicant, which is a
stand-alone restaurant) consumed food & beverages
prepared and supplied to them in the restaurant itself
or by way of a takeaway, it would qualify as a
‘restaurant service’. This attracts GST at 5 per cent
without `input tax credit.”
For the over-the-counter
supply of ‘readily available’ food and beverages which
are not prepared by the eateries, the AAR bench drew a
line. It said that these products will not come under
the ‘restaurant service’ category and the GST rate will
be applicable to each such item.
While making the decision,
the bench referred to a GST council meeting held in 2017
and a more recent circular issued by the Central Board
of Indirect Taxes and Customs (CBIC) in October. These
circulars stated that takeaway and doorstep delivery
services fall within the range of ‘restaurant services’.
“The ruling helps to
further clear the air. However, challenges will arise
for those restaurants who were also treating
over-the-counter supply of ‘readily available’ items
within the ambit of ‘restaurant service’,” TOI quoted
Chintan Vasa, chartered accountant at Aurtus Consulting
who represented the matter before the bench, as saying.
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