Readily Available Food, Beverages Sold Over Counter Is A Supply Of Goods, Does Not Qualify As “Restaurant Services”: Gujarat AAR

The Gujarat Authority of Advance Ruling (AAR) has held that readily available food and beverages that are not prepared in the restaurant and sold over the counter are supplies of goods that are liable to GST and do not qualify as "restaurant services."

The two-member bench of Amit Kumar Mishra and Milind Kavatkar relied on the ruling of the Appellate Authority of Advance Ruling, Uttrakhand, pronounced in the case of M/s Kundan Mishthan, in which it was ruled that sales of sweets, namkeens, cold drinks, and other edible items from sweet shop counters will be treated as supplies of goods with applicable GST rates of the items being sold and input credit will be allowed on supplies.

The applicant is in the restaurant business, which offers a variety of food items, including food and beverages prepared at the restaurant as well as readily purchased food and beverages sold over the counter. The applicants are not hotels, but rather standalone restaurants that only serve food and beverages.

The applicant has submitted that there are a common billing counter, software, and books of account for all the orders. There is no separate billing mechanism for the food and beverages prepared in the restaurant and for the readily available food and beverages sold over the counter.

The applicant sought an advance ruling on the issue of whether readily available food and beverages (not prepared in the restaurant) sold over the counter by the applicant to the customer, whether consumed in the restaurant or by way of takeaway, qualify as "restaurant services."

The AAR has held that the readily available food items (not prepared or cooked in the restaurant) sold over the counter by the applicant to the customer, whether consumed in the restaurant or by way of takeaway, do not qualify as "restaurant services" but instead fall under the category of "supply of goods," which is subject to the applicable rate of GST.

Applicant’s Name: Ridhi Enterprise

Date: 30.12.2022

Click Here To Read The Ruling