West Bengal AAR Clarifies GST Applicability on Tobacco and Non-Tobacco Hookah in Restaurants

The company, Indian Wire Products (applicant), has filed an application dated November 17, 2025, seeking the West Bengal Authority for Advance Ruling (AAR) Goods and Services Tax (GST), clarifying some queries concerning its business.

The applicant possesses a registered address at 38EM, Sanjeeva Garden, Thakdari Road, Green Valley, Dhapa Manpur, New Town, North Twenty Four Parganas, West Bengal, 700156.

The applicant is registered under the Goods and Services Tax (GST) as a provider of restaurant services and runs a restaurant named “Pappu Chaiwala”. While running the restaurant, the applicant is also thinking of offering hookah (both herbal and tobacco) to customers inside the restaurant as part of the dining experience.

Questions Asked Before West Bengal AAR:

The applicant has asked the following questions seeking the West Bengal Authority for Advance Ruling (AAR):

“Question 1: Whether or not serving of non-tobacco hookah / tobacco-based hookah in the restaurant along with food will be termed as supply of goods or services within the ambit of Clause 6(b) of Schedule II to the CGST Act?

Question 2: If yes, what will be the rate of tax applicable on herbal (non-tobacco-based) flavours and tobacco-based flavours?”

Answers Given by West Bengal AAR:

The West Bengal Authority for Advance Ruling (AAR) has given the following answers to the questions asked by the applicant:

Answer 1: When hookahs (no matter if they are tobacco or non-tobacco) in restaurants are served along with the food, they are termed as two separate supplies under GST.

Serving food in a restaurant is treated as a supply of services under Clause 6(b) of Schedule II of the CGST Act, 2017. While serving hookah is not treated as a restaurant service, it is instead considered a composite supply of goods. This concludes that Clause 6(b) of Schedule II of the CGST Act, 2017, applies only to the food service and not to the hookah supplied in the restaurant.

Answer 2: Since the two services are two separate supplies under GST, both will attract different tax rates. The service of supplying food in the restaurant will attract GST at 2.5% CGST + 2.5% SGST as per serial no. 7(ii) of the table in Notification No. 11/2017 – Central Tax (Rate) dated June 28, 2017, read with the corresponding State Tax notification, as amended.

Tax imposition on hookahs differs based on their nature (tobacco or non-tobacco). The supply of tobacco-based hookah in restaurants is taxed at 20% CGST + 20% SGST vide serial no. 17 (HSN code being 2403) as per serial no. 17 (HSN code being 2403) of Schedule III of Notification No. 01/2017 – Central Tax (Rate) dated June 28, 2017, read with Notification No. 19/2025 – Central Tax (Rate) dated December 31, 2025, read with the corresponding State Tax notification, as amended.

On the other hand, the supply of non-tobacco-based hookahs (dried tea leaves, mint leaves, dried rose petals, etc., as stated by the applicant) is treated as the supply of goods and hence liable for GST imposition at 9% CGST + 9% SGST as per serial no. 639 of Schedule II of Notification No. 01/2017 – Central Tax (Rate) Dated 28.06.2017, read with the corresponding State Tax notification, as amended.