The AAR held that, without reference to whether or not shoppers of Riddhi Enterprises (the applicant, which is a stand-alone eating place) fed on meals & drinks ready and provided to them within the eating place itself or by means of a takeaway, it will qualify as a ‘ eating place provider’. This draws GST at 5% with out enter tax credit score, it stated.
However, the AAR benchdrew a line when it got here to over the counter provide of ‘readily to be had’ meals & beverage pieces no longer ready via the eating place, say, sweets, chips or bottled drinks. These would possibly not qualify as a ‘eating place provider’ and would draw in GST charge acceptable to every such merchandise, AAR held.
The AAR bench referred to a GST council assembly held in 2017 and a newer round issued via the Central Board of Indirect Taxes and Customs (CBIC) in October, which clarified that takeaway and doorstep supply products and services fall inside the ambit of ‘eating place products and services’. Advance rulings have a persuasive price in exams. “The ruling is helping to additional transparent the air. However, demanding situations will rise up for the ones eating places who have been additionally treating over the counter provide of ‘readily to be had’ pieces inside the ambit of ‘eating place provider’,” said Chintan Vasa, chartered accountant at Aurtus Consulting and who represented the matter.
“In case of ice-cream parlors levying 5% GST, pursuant to a GST Council meeting, the CBIC in August 2022 clarified that while a rate of 18% would apply, past cases would be treated as fully paid to avoid unnecessary litigation. The GST Council must recommend a similar clarification for restaurants,” stated Vasa.