Ice-cream as a dessert in food thali to attract less GST than when sold independently

The Gujarat Authority of Advance Ruling (AAR Gujarat) in the matter of M/s. HRPL Restaurants P Ltd has ruled out that Ice-cream as a dessert in food thali to attract less GST than when sold independently.

The applicant runs a chain of restaurants/eating joint namely (a) 1944 the HOCCO Kitchen; (b) HOCCO eatery; & (c) Huber and Holly. The applicant operates under two business models v/z (i) company owned restaurants & (ii) franchise restaurants.

The Question and Ruling as follows:

1. Whether supply of ice cream from any of the outlets of HRPL be considered as supply of restaurant services’ or not?

2. If the supply is classified as ‘restaurant services’, what would be the applicable rate of tax thereon in accordance with notification No. 11/2017- CT(Rate) dated 28.6.2017 (as amended from time to time)?

3. If not the restaurant services, supply of ice cream from any of the outlets of HRPL can be considered as supply of ice cream from ice cream parlour & chargeable to GST @ l8o/o ?

RULING

1. The supply of ice cream from the outlets of the applicant cannot be considered as supply of restaurant services’. The readily available ice creams (not prepared in their outlets) sold over the counter is supply of goods. However, an ice cream when ordered and supplied along with cooked or prepared food. through their outlets would assume the character of composite supply, wherein the prepared food being the principal supply and hence qualifies as ‘restaurant services’.

2. The supply of ice cream from the outlets of the applicant is not classified as ‘restaurant services’. However. the composite supply, supra” classifiable under ‘restaurant service’ would be leviable to GST @ 5% with no input tax credit as per Sr. No. 7(ii) of notification No. I l/2017-CT (Rate) dated 28.6.2017 as amended vide notification No. 20/2019-CT (Rate) dated 30.9.2019.

3. The supply of only ice cream (not prepared in their outlets and which is readily available) from any of the outlets of applicants is held to be akin to supply of ice cream from ice cream parlour, leviable to GST @ l8%.

For Official Ruling Download PDF Given Below: