Goods and Services Tax

Sweet Shop-Cum-Restaurant With Takeaway Facilities

Goods and Services Tax – GST – By: – CA Akash Phophalia – Dated:- 12-1-2019 – Introduction Globalization has changed different aspects of the Indian society including food habits. In its swing, Food and Beverages (F&B) Industry has also changes the nature of its service cum supply. Nowadays, it is common to find Sweetshops cum restaurant cum takeaway facilities under one roof. In this article the author aims to throw light on the applicability of tax rate on the various kinds of supplies made by such shops under one roof on the basis of advancing ruling recently decided [2018 (19) GSTL 356 (AAR-GST) Before the Authority for Advance Ruling under GST, Uttarakhand, Re : Kundan Misthan Bhandar 2018 (11) TMI 1266 – APPELLATE AUTHORITY FOR ADVANCE RULING, UTTARAKHAND ]. Background The assessee is running a shop where it sale and serve sweetmeats, namkeens, cold drinks and other edible items and also runs restaurant. The dilemma here is related to classification of the supply, whether th

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greed to be severed before supply or under a contract of supply; (74)  mixed supply means two or more individual supplies of goods or services, or any combination thereof, made in conjunction with each other by a taxable person for a single price where such supply does not constitute a composite supply (90)  principal supply means the supply of goods or services which constitutes the predominant element of a composite supply and to which any other supply forming part of that composite supply is ancillary; (102)  services means anything other than goods, money and securities but includes activities relating to the use of money or its conversion by cash or by any other mode, from one form, currency or denomination, to another form, currency or denomination for which a separate consideration is charged. Mixed supply and Composite supply The concept of mixed or composite supply has evolved from the concept of naturally bundled services which was explained in the Education Gu

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which gives such bundle its essential character Under GST law, supplies which are bundled with two or more supplies of goods or services or combination of goods and services are classified, with distinct characteristics, as : (i) Composite Supply (ii) Mixed Supply If we look at the definitions (supra), Composite supply is one where two or more goods or services or both are supplied together, in a natural bundle and in a normal course of business, provided one of which is a principal supply. However, principal supply will be that supply which is predominant over other supplies. This means that the goods and services are bundled owing to natural necessities. The composite supply is taxed at the rate applicable to the principal supply whereas a Mixed supply means two or more individual supplies of goods or services, or any combination thereof, made in conjunction with each other by a taxable person for a single price where such supply does not constitute a composite supply. It means each

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eparation & sale of food, and serving the same and therefore it constitutes a composite supply. It further satisfied the following conditions of a composite supply: (i) Supply of two or more goods or services or both together (ii) Goods or services or both are usually provided together in the normal course of business. In the instant case the nature of restaurant services is such that it may be treated as the main supply and the other supplies combined with such main supply are in the nature of incidental or ancillary services. Thus restaurant services get the character of predominant supply over other supplies. Therefore in the present case the supply shall be treated as supply of service and the sweet shop shall be treated as extension of the restaurant in as much as the said activity covered under Schedule II of the Act ibid and the relevant portion of the same read as under: 6. Composite supply The following composite supplies shall be treated as a supply of services, name

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ay from the premises where such food or any other article for human consumption or drink is supplied, other than those located in the premises of hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes having declared tariff of any unit of accommodation of seven thousand five hundred rupees and above per unit per day or equivalent. Explanation. – declared tariff includes charges for all amenities provided in the unit of accommodation (given on rent for stay) like furniture, air conditioner, refrigerators or any other amenities, but without excluding any discount offered on the published charges for such unit Provided that credit of input tax charged on goods and services used in supplying the service has not been taken. Conclusion Thus, in view of the above discussion, the classification of supply shall be of restaurant services and the rate of GST on aforesaid activity shall be 5% as on date and input tax credit shall not be ad

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