{"id":319,"date":"2020-09-03T11:08:54","date_gmt":"2020-09-03T11:08:54","guid":{"rendered":"https:\/\/www.akgvg.com\/blog\/?p=319"},"modified":"2020-12-28T09:11:25","modified_gmt":"2020-12-28T09:11:25","slug":"gst-on-food-in-bakery-in-restro-in-hotel","status":"publish","type":"post","link":"https:\/\/www.akgvg.com\/blog\/gst-on-food-in-bakery-in-restro-in-hotel\/","title":{"rendered":"GST on food in Bakery \/ in Restro \/ in Hotel"},"content":{"rendered":"\n<p>The sight that first comes to the mind while thinking of restaurant service is that of mouth-watering meals, leisure &amp; comfort. But understanding the taxability of the same has been a tedious &amp; topsy-turvy task to accomplish.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"556\" src=\"https:\/\/www.akgvg.com\/blog\/wp-content\/uploads\/2020\/12\/GST-on-food-in-Bakery-in-Restro-in-Hotel-1024x556.jpg\" alt=\"\" class=\"wp-image-920\" srcset=\"https:\/\/www.akgvg.com\/blog\/wp-content\/uploads\/2020\/12\/GST-on-food-in-Bakery-in-Restro-in-Hotel-1024x556.jpg 1024w, https:\/\/www.akgvg.com\/blog\/wp-content\/uploads\/2020\/12\/GST-on-food-in-Bakery-in-Restro-in-Hotel-300x163.jpg 300w, https:\/\/www.akgvg.com\/blog\/wp-content\/uploads\/2020\/12\/GST-on-food-in-Bakery-in-Restro-in-Hotel-768x417.jpg 768w, https:\/\/www.akgvg.com\/blog\/wp-content\/uploads\/2020\/12\/GST-on-food-in-Bakery-in-Restro-in-Hotel-1536x833.jpg 1536w, https:\/\/www.akgvg.com\/blog\/wp-content\/uploads\/2020\/12\/GST-on-food-in-Bakery-in-Restro-in-Hotel-2048x1111.jpg 2048w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<ul class=\"wp-block-list\"><li><strong><em><u>Restaurant<\/u><\/em><\/strong><\/li><\/ul>\n\n\n\n<p>A<strong>restaurant <\/strong>is a place of business where food is prepared in the premises and served <strong><u>based on the orders received from the customer<\/u><\/strong>. Further, restaurant service is not limited to service <strong>from<\/strong> the restaurant but covers <strong>all the services supplied from <\/strong>the restaurant, eating joint, mess, canteen i.e. all services are included whether for consumption <strong>on or away from the restaurant<\/strong>. Hence, even if the food is supplied on take-away basis it would be classified as restaurant service.<\/p>\n\n\n\n<p>Supply of packaged food being namkeens, bakery products, cold drinks,sweets,and other edible items are supplied to customers at a place attached to the restaurant, then such supplies would fall within the ambit of restaurant service and will be taxable @ 5% IGST rate without ITC.<\/p>\n\n\n\n<p><strong><u>Taxability<\/u><\/strong><\/p>\n\n\n\n<p><strong>Declared tariff<\/strong>&gt; \u20b9 7,500 = <strong>@ 5 % IGST rate without ITC<\/strong>(<strong>Premises of hotels<\/strong>, inns, guest houses, clubs, campsites etc.)<\/p>\n\n\n\n<p><strong>Declared tariff<\/strong>&lt; \u20b9 7,500 = <strong>@ 18 % IGST rate without ITC<\/strong>(<strong>Premises of hotels<\/strong>, inns, guest houses, clubs, campsites etc.)<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><strong><em><u>Bakery<\/u><\/em><\/strong><\/li><\/ul>\n\n\n\n<p>A shop in which bread (&amp; often other baked goods such as cakes) is baked and\/or sold.<\/p>\n\n\n\n<p><strong><u>Taxability<\/u><\/strong><\/p>\n\n\n\n<p>Currently, branded snacks are taxed at 12% &amp; pastries \/ cakes are taxed at 18%.<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Restaurant &amp; Bakery are same?<\/strong><\/li><\/ul>\n\n\n\n<p>Restaurant is a place of business where food is prepared in the premises &amp; served on the order received from the customer. Whereas bakery is a place where ready to eat items are sold and mere facility is provided to have it from the shop<\/p>\n\n\n\n<p>However, if the supply of packaged food as mentioned above are supplied from a separate place other than a restaurant or a separate specified area of a restaurant, then such supply <strong>would not fall within the ambit of restaurant service<\/strong>. As the same being not supplied from the restaurant, hence no service could be deemed to be provided to treat the supply as a composite supply. The person effecting suchsupplies would also be <strong>eligible to claim the credit of input tax<\/strong>.<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Desk of AAR<\/strong><\/li><li>In Advance Ruling of <strong>Kundan Misthan Bhandar<\/strong> it was held that sale of sweets, namkeens, cold drinks, and other edible items from sweetshop counter will be <strong>treated as supply of goods<\/strong> with applicable GST rates of the items being sold and <strong>ITC will be allowed on such supply<\/strong>. Further, held that <strong>sale of sweets, namkeens, cold drinks, and other edible items through restaurant<\/strong> will be <strong>treated as \u2018composite supply\u2019<\/strong> with restaurant service being the principal service. Existing <a href=\"https:\/\/www.akgvg.com\/gst-related-services\" target=\"_blank\" rel=\"noreferrer noopener\">GST rates on restaurant service<\/a> will also be applicable to all such sales and <strong>no ITC will be allowed.<\/strong><\/li><li>In Advance Ruling of <strong>M\/s Square one Homemade Treats <\/strong>it was held that resale of food &amp; bakery products does not fall under restaurant services.<\/li><\/ul>\n\n\n\n<p><strong><u>Conclusion<\/u><\/strong><\/p>\n\n\n\n<p>Based on AAR &amp; other discussion mentioned supra, if packaged food being namkeen, sweet, bakery product is being sold by the restaurant the same will be taxable @ 5% without ITC. But if the same are being supplied from a place other than a restaurant or from separate specified area of the restaurant then such supplies would attract their specific applicable GST rates (e.g. Namkeens \u2013 12%, cakes \u2013 18% etc) &amp; ITC will be allowed on such supplies.<\/p>\n\n\n\n<p><strong>This content is meant for information only and should not be considered as an advice or legal&nbsp; opinion, or otherwise. AKGVG &amp; Associates does not intend to advertise its services through this.<\/strong><\/p>\n\n\n\n<p>Posted by:<\/p>\n\n\n\n<p>CA Tarun Kapoor<\/p>\n\n\n\n<p>AKGVG &amp; Associates<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The sight that first comes to the mind while thinking of restaurant service is that of mouth-watering meals, leisure &amp; comfort. But understanding the taxability of the same has been a tedious &amp; topsy-turvy task to accomplish. Restaurant Arestaurant is a place of business where food is prepared in the premises and served based on&#8230;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[163,162,167,166,164,165],"class_list":["post-319","post","type-post","status-publish","format-standard","hentry","category-gst-services","tag-gst-audit-company","tag-gst-consultants-in-india","tag-gst-on-food-in-bakery","tag-gst-on-food-in-hotels","tag-gst-on-food-in-restaurant","tag-gst-on-food-items"],"_links":{"self":[{"href":"https:\/\/www.akgvg.com\/blog\/wp-json\/wp\/v2\/posts\/319","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.akgvg.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.akgvg.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.akgvg.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.akgvg.com\/blog\/wp-json\/wp\/v2\/comments?post=319"}],"version-history":[{"count":2,"href":"https:\/\/www.akgvg.com\/blog\/wp-json\/wp\/v2\/posts\/319\/revisions"}],"predecessor-version":[{"id":921,"href":"https:\/\/www.akgvg.com\/blog\/wp-json\/wp\/v2\/posts\/319\/revisions\/921"}],"wp:attachment":[{"href":"https:\/\/www.akgvg.com\/blog\/wp-json\/wp\/v2\/media?parent=319"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.akgvg.com\/blog\/wp-json\/wp\/v2\/categories?post=319"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.akgvg.com\/blog\/wp-json\/wp\/v2\/tags?post=319"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}