The Gujarat AAR dismissed the appeal, holding that food and beverages not prepared in-house and sold over the counter constitute a supply of goods rather than restaurant service, attracting standard GST rates with ITC available.
Appeal dismissed; appeal against the finding on ready-made food supply constitutes goods supply taxed at standard rate.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
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GtJ.l AIlA'l' A l'I'E l. LA'I'EAtI'l'tIOR I'I'Y F'ORAI)VANCI'1, lt tl LING (; OOI)S AND SI,],I{VICH,S'l'AX *m:: I)/5, llA.IYA KAll IIIIAVAN,ASIIITAMlloAl)' AIIMI,l,l)AIlAf) - 3tt0009. |
At)vANCII IttJLING(nl'Pl1AL) NO.GIIJ/GAAAIVAI'}l'}lrnl/2025104 ( I N AI,l, L IC A'l'l ON NO. Advancc Itul ing/SGS'1.&C(iS'l'/2023 /n I{/02)
DatcZA)l .2025
| Namcanclacldrcssof'thc appcllant |
M/s.I{idclhilrntcrprisc, 2,(iroundfloor, Magniltco, Opp.'['imcScluarc, Nr.AvlonIIotcl,SGIlighway, Ahrncdabad-3U0054. |
|---|---|
| GS'['INol-thc appcllant | zLAXIrl{I840C17.8 |
| Advancc IturlingNo.and | GLIJ/GAAI{/R/2022151datccl30.I2.2022 |
| I)atc | |
| I)atcoIappcal | 2t.01.2023 |
| [)atcoII)crsclnalIIcaring | Oti.l1.2024 |
| l)rcscntIctrthcappcllarrt | Shri ChintanVasa,(lA |
At thc ourtsct wc would likc to makc it clcar that thcprovisiorrso{' tlrc Ccntral(ioods anci Scrviccs'l'ax Act,20ll ancl(iurjarat (iooclsancl Scrviccs'l'ax Act, 2017 (hcrcinaltcr rcfcrrcd to as thc'CGS't'Act,2017'ancl tlrc 'GGS'l'Act, 2017 ') arc pari mctleria and havc thc sarnc provisions inlil<c mattcr ancl diflbr fron'r cach othcr only on a fcw spccific provisions.'I'hcrclbrc, unlcss a mcntion is particularly madc to such dissirnilarprovisions, arcfr;rcncc to thc CGSI'Act,2017 r.vould also rncan rclcrcncc to thc corrcsponcling sirrrilar prcvisions in thc GGS'l' Act, 2017.
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Ilricfly, thc lbcts arc cnumcratcd bclow for casc olrcl'crcncc:
I)
-{:*':;
2
4. In vicw ol' thc lbrcgoing facts, thc appcllanthad sought Advancc
Ituling on thc Iollowing qucstir>ns, viz'.
I. l,Vhether the.fbod &l'tet,crcrges prepored cft supplieclh); lhe,4pltiicunlto ils cttstrtmer.s u'helher consLttne(l in the ra,\tauruttl ot' h),v'uy oJ'tukeuv,u);rJuulilicsus t"t:sluururtl servicas'rmcl is clu.r.sifiultlc uncler,\A("996331;,\ert,ices Ttroviclec.lby ra,sltrut'turl,;, cofi:,s crncl :;ittrilureoling ./acilitiesinclucling tukauv,cqt service:;, room servicesancl cloor cleliver,o.1'.fboc{'leviubleto GST' QD5% with no inpul tax creditu,s per Sr. l'/o.7(ii) o./ iYoti/icationiVo. l1/2017 - Centrctl'l'ctx (tlcilc) tlcrtecl .hrne 28, 2017,reocl v'ith ,\r. lVo. 7(ii) of l{oti/iccrtion lrkt.l l/2017 - State'l'ux(llate) dutatl ,luttc 30. )017'.)
tt l,Vltct/tt,r lhc rctrtlil),t6,rriluhlc.litrxi trncl bat,crugc.'t1()l l)t'cl)rtredin lhc ra,sluurunl),volrl over lhe c'otrttlcr by thc tlpltlic'ttttl to lltc tu:;lontervlhelhcr c:onstrtttetlin the rcsluurcutl or b.lt vrult tll lcrkccitt,crt, qtrcrlifie,y u.<sup>'r'a.'tuurunl sarvices'clu.ssy'iable urulct" ,\r7("996331;Sert'ice.sprrtt'itleclb.t' re,\lCtLtrctttts, cu.fbs utttl ,yitttilar euling /acilities incltlc{inglukeaulct}l sert;ic,es'r0onl sert,ice,y ancl cfutor tlalivery o/Jbocl'lct,icrble to GS'I'Qr 5%with no input tox crcdilas perS'r". ,Vo.7(ii) d l{otiJiccrtion l{o. 11/20t7 - Central'l'ux (llctte.)clated.htna 28, 2017, reacl with Sr. IVo.7(ii) d tYotificution llo. 1l/2017 - Stcrte I'u.r(llute)clcrtecl,Iuttc 30,2017'?
5. ConscclLrcn[ to hcaring thc applicant,thc Gurj arat Ar-rthority Ibr
Advancc Iluling lGAn I{ l, rccorclccl thclbllovviirg finciingst)iz
fbllows:
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Pa
3
/lt l/ <sup>(;
g. Wc havc carcfullygonc through and considcrcdthc appcalpapc'rs, writtcn submissiorrs lllcclby thc appcllant, subntissionsl.nadc at thc tiltrc ol pcrsonal hcaring, thc impugncdruling and othcr ntatcrials availablcoll l'ccorcl.
' lot g-vn,-24-nnA It
":0:016;'l'MIti l-5-nnI{ ohattis-u,arh
I)agc J tt l' 7
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Schedule II
Iscc scction 7 |
Activitics lor transactions I to be trcated as sup nlv of soods or supply ofucfvtee
'l'he /itllovt,ing, c'ontytosile.supplies shull be lrealec{ u.v u,;upply o.f ,s'ert:ices', namely:(ct) .. .., untl
(b) .stt1t1tly, b;t wu)) o/ or u.\ part qf uny service or in uny olher munner v,hals'oever, o/'goocls, being lbocl or any olher arlicle.fbr human con,'untplion or any clt'ink (other thutt ulcoholic litluor.fbr humon consLtmplion), where such sultply rtrsert:ice is /br cash, cleferrec{ payntenl rtr other valuable consicleralion.
) dated 28.6.2017 as amcnded vide notification Ntl. 2012019-CT ) datcd30.9.2(179,wef'1.10.2019
"(xxxii) "lle.slouranl ,rervice!: means suppllt, b1t u,cty o.f'or as' part rtf'an-y service, of'goocls, being./bocl or any other article .fbr humanconsumption or ony clrink, providecl by a restauranl, ealingjoint includingnless', ccrnteen, yyhelher.fbr con,sumplion on or away.fiom the premis'e,s' vvhere s'uch ./ood or un), olhcr artic'lc .fitr huntun c'onsumltlion or clrink i.;.stttrtplied.
/
C'ircular No . 16412(112021-GS'I' dated6. 10.2021 lrclcvantcxtractsl
3 Scrviccs hy ckrud kitchcns/ccntral hitchcns:
).L.)"t 'l'hc worcl 'rcstar-rrant scrvicc-, is clcllnccl in Notil-rcation No. Ill2Ol 7 (l'l'ltas
bclow': -
" lle,ylartranl ,s'ervicei t meuns supply, hy way o,f'or us parl rtf any service, o.f goods', hcing./ttocl rtr unlt s17nr urlicle.fbr humun consLtmption orunydrink, prot;idedby ct ras'lctttrtrnl, euling .loinl inclucling nless, canleen,whether .fbrcon,sutttplionon ot'(nr(t-y /i'ont the premisesy,here such /itocl oruny otherurticle fbrhttntun L'on,'umltl ion or clrink i.s .s'ttytpliccl."
3.3 !'he explunatory notes lo the classi/icationo/'service state that "reslauranl serttice , inclucles ,services prot,ided byllestaurants, Cqfes and similar ealing Jacilities inclttding tukeau)ay services,rootn servicesand doorclelivery oJ ./bod.T'here.t'bre,it is clecrr thcrt takeayt)oy,yervicesancldoor cleliveryservices.for consumption o./'./bod arealso consiclererl as reslourctnl.seryice ond, accorclingly, sert,ice by an entity,by vtcty of'cooking ctncl sttpltly o/ ./itocl, even i/ itis exclu.sivelyby way o"f takeuv,cry or cloor clelivery or lhrough or frorn any reslattranlu,ould be coyered hy restauranl service. 'l'his vt,oulcllhus cotter .sert;ice,y prot,ided by cloucl kitchens/centralkitchens.
3.1 tlccurclingly, u.' recontmenclecl bylhe Council, iti.r' clari/ied lhal 'verttice proyitlecl by wcrl) ql c'ookingancl .snpltlyq/ /oor1,by cloud kitchens/central kitchens are c,ovat.etl rtncler ,, r.e.\t(rLl'crntserttice. t, cr,s clefineclinnrtlificctlionl,ro. t 1/2017-C'entt'al' 'l'trx (t?trlc) uncl ctltrcrcl 5%, GS't' f vtilhot'tt IT'Cl.
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J.2 lce cream pcrrlors,sellcrlreacly ntanufaclured ic'e-crerrttt trncl lhey clo not huve u character o.f areslauranl.Ice-creant parlorsclo nol engage in unst .fitrnt tt,f'cookingul crny ,slage, whereas,reslauranlsertticeiivolves the asltecl o.f' cooking/prepuring cluring the course o./'providingservice.'l'hus,supply oj ice-creatn parlorslund,\ on a di.//brent ./itoling thon t"estaurantservice.l'heir acti:,ityiriaiit sultply of ice creomas good's (a manttfac'tured ilem) and ngta5 a serttice, even if'certain ingreclients of'service are presenl'
4.3 Accrtrdingly, asrecommenrJeri by the Council,ili'. clari/ied that v'hereice creant parptrssell already ntanttfacturetl ice-crearuanrL rJo nol cook/prepare ice-creum.fbr consumlttion likea reslatrranl,il is supplyof ice creamas goods uncl nol (ts a ,sert'ice,even i/ the supplyhcr.; certain ingreclientsof'service.Accordingly, it i,s clcrri/ied thul icc cre(tn't .srlt.l byi'parloror an)) sintilur outlet v,oukJ allrctcl GS'al lhe role of lB%''
t312023-GS'l' datcd1.8.2023
\l'lrether supply-of food or l:er-eregesiu cinema hallis texablees restaur"aut sela-I(e:
_l R,efereces har-ebeen receir-rd requesting for clar-ification rr,{rtthrrsr-rpplY ol tbodafld lr-erages at cinemnhalts is ta:rable as restaurant sen-ice u-hichattract GST at the rate of jo'r or not
'_1.1 As per Explzuration ar Para -l (,rxii) to notrfication lio. 1t'101i-CTR datecl :$.0d' l01l' ,,Re-slr?.ur-ari,+ SEI-r,ice'?ndc?irs srip-pJr; ,!3,rs'q1' ef or rlsPtrrf Q{an}' slif ic€., o-f gootis, being.foocior cu.ry' orjrr.r. article ..farhw.rlari,cotrsrrliiprforor tzr'n' ririrr.L, prot'idedir.]' ,i'estattrsr:1,eclriirg;t:f;tl li,cJtiCii;grri€.ss,cofiteet.t,lt,l'reiftsr.,forcc:l'tstr.rripric:lto?'t or o11'c?]:-fra?t ril-e pl,ellxfses tt riigi-tzsttclt -fbotjn,r{irj1i otlier crtir.it .to,' iii*iltcl:; croilsilriipltotl o;{ r;ri-ir;,i: ,:-r si,;lrrileti'"
,1.: Eatrlg lolru is au.ide trrtn nhichurclnclrs refi-eslunent or efltrllssrirll,sl:roskscoLtlltt-=1--t or rtstaurant at a citrernaalso-
j.:i Tle cinerla operatortrla.: rLlrl thrse refi-esluletlt or eatiflgstalls.'ki,>sks''coulllrrsL-:r restaura,t thernsel-esor t}ler., mal, gli-e it on confi-actto a third pratTv Tht cr-rst$lrler r11a' lrkc to ar-ail the sen'icessupplirdb1. theserefreslunrnt,snack couttters or choose IloI t'r ataiithese sr-n-ices. Further, thecinenraoFreratorcafl also install tendrng nrachinrs.or supplv ant' other rrcreatiorral srn-ice suchas tluCIughcou:-operated rnachinesetc- u'hich a custolrler 1114' or llla1' not ai-ail.
_i 4 It is lerebv clarifieclthat suppll.of f'ood or ber-eragesul a cinetnahall is taxalr]'eas 'restauraflt setrt-ir:e' as lorrg as:
ai rhe fbo,i or bei'eragesfi.resuprplied b], tta]'ofor as pafi r:t'a st:n-tcr-zurcl trl suppliecl in,Jependentof,the cinerna exlrrbitiottren.'it:e.
-1.-iItrs ftir-ther clar-rtiedthatq-herethe sale of cinrrua ticket and suppl1'ol tood and bel-erages iu-e clubbe<ltogether.and such bundled supplvsatist-tes the test of cotupositesupph'- tht elti1g supprll' u'illanract GST ar the rate aprplcablrto ser-ice .:f ex]rilrition prrurcil:ai supp11-
I)agc: 5 o l'7
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I I . Wc llnd that thc appcllant, as is alrcady mcntioncd supro,, is aggricvcd only against ruling givcn in rcspect of qucstion no. 2, whcrcin thc GAAI{ hclcl that thc rcadily availablc lood & bcvcragcs (not prcparccl in thc rcstarurarrt), solcl ovcr thc countcr, is supply of goocls & is liablc to applicablc ratc ol'(iS'l' and that it docs not cluali{y as 'rcstaurant scrvicc'.
I 3 . 'l'hc a lorcnrcntioncd linding is substantiatccl vidc thc clarilication issurccl vidc circular no. 20111312023-GS'l' datcd 1.8.2023, rcproduccd supro, rvhcrcir-r it was clariflcd that sr,rpply o['food or bcvcragcs in a cincrna hall is taxablc as'rcstaurant scrvicc'as long as thc lbod or bcvcragcs arc supplicclb3 way of or as apart of a servicc....
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lhc CIIIC, as mcntioncd supro. We thcrclorc,concur with thc finclingso['thc GAAIT.
16. Lastly, thc applicant has rclicd upon two rulingsvzz
IalM/s. Kunclan Misthanl]hanclar3 . In this casc, thc AAAI{o1'lJttarakhand, was clcaling with a mattcr whercin thc applicant was running a swcctshopand a rcste.turant, in two clistinctly markcd scparatc parts of thc samcprcmiscs in additiclt-t to maintainingscparalc accounts as wcll as scparatc billing; that thcgoods solcl lrom swcclshopwcrc billccl cxclusivcly as swcctshop salcs whcrcas thcgoocls surpplicclfi'orn rcstattrant wcrc billccl uncicr rcslaurant scrviccs. ['l'was hcld thatwl-rcn thc gooclsarc sllpplicclto cttst<lmcrsin tl-rc rcstaurant or as a takc aways liom thc rcstaurant countcr itis a cornpositcsr-rppl)i vrrith rcstaurant scrvicc bcing thc principal supply, sittcc lbod isnalurally br-rncllccJ with thc rcstaurant scrvicc. As is apparcnt, thc lacts of thc casc arc notsin-rilar and hcr"rcc,wc clo not Iind thc rcliancc to thc said ruling tcnablc. Wc furthcr also clisagrcc with thcfinclingsol thc GAAIT in para 17, of thc impugnccl ruling, to this cxtcnt.
Ib IM/s. (iangaurSwcctsa. Againin this casc, thc AAI{, Chhattisgarh, was dcaling witha mattcr whcrcin thc applicanl hacl a swcctshop in thcground floor &a rcstaurant at thc llrst floor of thc sarrc building; that for thc supplics madc fromthc rcstaurant thcrc bcing supply ol'prcparation & salc of goods & scrving thc samc thcrc cxist lilsupplycll'two or lrlorc goocls or scrviccs or both logcthcr & lii I goods or scrviccs or both arc usuallyproviclcci togcthcr in thc normal coLlrsc of busincss, having all thcingrcclicntsol- a compositc sr-rpply. As is cviclcnt again, thc lacts o1'thc casc r-rclt bcir"rg siurilar, thc rclianccis nol-tcnzlblc.
lrvcn othcrwisc, thc ruling of an Advancc Ituling Aurthority or an Appcllatc z\uthority undcr scction 103 ol'thc CGS'I' Act, 2017, is binding only on thc applicant & thc conccrncd olficcr or thcjurisdictional olficcr in rcspccl ol'thc said applicant. IIcncc, thc rcliancc placcd on alorctncntioncd ruling isnot platrs iblc.
17 . In vicw of thc abovc findings, wc rcjcct thc appcal filcd by appcllant M/s. I{iddhi lintcrprisc, against thc Advancc ItulingNo. GIIJ/GAAI{/1V2022151 datcd 30.12.2022, passcd by thc Gujarat Authorityfbr Advancc I{uling.
t" ( Ifaj.& tupno ) /..r;Tf,mi Member (SGST) :)''-'^:':,
(B V Siva Naga Kumari) Mcmbcr (CGST)
Placc: Ahmcdabad I)atc : ?-L01.2025
' 20I9-Vil.-24-Ann t(
'' 1020 (6)'t'i\4t til-s-nn It, ohattisgarh
I)a
3 issues framed by the court
Whether supply of food and beverages prepared or supplied by a restaurant constitutes service taxable at 5% under SAC 996331,
Whether supply of ready-made food and beverages sold over the counter by a restaurant qualifies as restaurant service subject to 5% GST with no ITC
Whether reliance on prior Advance Ruling Authority decisions by different states is legitimate in the present appeal
Colour shows how this judgement treated each authority
M/s. Kundan Mishthan BhanderDistinguished¶96
M/s. Kundan Mishthan Bhander
M/s. Ctangaur SweetsDistinguished¶97
M/s. Ctangaur Sweets
6 provisions across 1 enactments
M/s. Iiddhi Enterprise
Gujarat Authority for Advance Ruling
Member (SGST)
B.V.Siva Naga Kumari
Member (CGST)
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
