2018 (11) TMI 1266 – APPELLATE AUTHORITY FOR ADVANCE RULING, UTTARAKHAND – 2018 (19) G. S. T. L. 356 (A. A. R. – GST) – Classification of supply – Supply of goods or supply of services – composite supply or mixed supply – Supply of pure food items such as sweetmeats, namkeens, cold drink and other edible items from sweetshop which also runs a restaurant – bundled services – rate of tax – entitlement of input tax credit.
–
Held that:- 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 service, or any combination thereof; made in c
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
ly of preparation & 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; and (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.
–
Rate of GST – Held that:- Since we already held above that the activity of the applicant come under the purview of “restaurant service
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
. 08/2018-19 Dated:- 22-10-2018 – SHRI VIPIN CHANDRA AND SHRI AMIT GUPTA MEMBER Present for the Applicant: Shri Aishwarya Sharma, Advocate Present for the Concerned Officer: None RULING Under Section 100(1) of the Uttarakhand Goods and Services Act, 2017, an appeal against this ruling lies before the appellate authority for advance ruling constituted under Section 99 of the Uttarakhand Goods and Services Tax Act, 2017, within a period of 30 days from the date of service of this order. 1. This is an application under Sub-Section (1) of Section 97 of the CGST/SGST Act, 2017 (herein after referred to as Act) and the rules made thereunder filed by M/s. Kundan Misthan Bhandar, Subhash Market, Ramnagar (Nainital) Uttarakhand, primarily engaged in the business of supplying goods & services both and seeks an advance ruling on the question, details of which given below as: (a) whether supply of pure food items such as sweetmeats, namkeens, cold drink and other edible items from sweetshop w
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
ction (1) of section 100 in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant. 3. In the present case applicant has sought advance ruling whether the activity of the applicant is supply of goods or supply of services, nature & rate of tax on items and input tax credit. Therefore, in terms of said Section 97 (2) (d), (e) & (g) of Act, the present application is hereby admitted for the questions supra in terms of Section 97 (2) of Act. The provisions of said section are reproduced below: (2) The question on which the advance ruling is sought under this Act, shall be in respect of,- (a) classification of any goods or services or both; (b) applicability of a notification issued under the provisions of this Act; (c) determination of time and value of supply of goods or services or both; (d) admissibility of input tax credit of tax paid or deemed to have been paid; (e) determination of the liability to pay tax on any go
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
ions of law and the same are covered under section 2 of the Act ibid. The relevant portion of the same extracted an read as under: (30) composite supply means a supply made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business one of which is a principal supply; (52) goods means every kind of movable property other than money and securities but includes actionable claim, growing crops, grass and things attached to or forming part of the land which are agreed 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
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
Under Service Tax, this mechanism is called Bundled Service – which is the rendering of a service or services with another element of service of services. The service tax law was dealing with pure services and not with goods per se. Now the concept introduced is for goods also and is linked with the concept of Principal Supply. 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 t
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
supply, classified in terms of a supply of goods or services attracting highest rate of tax. C. From the discussion supra and submission made by the applicant we find that in the case of sweet shop cum restaurant, the services from the restaurant is a principle supply which provides a bundled supply of preparation & 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
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
GST rates on services under Notification No. 11/2017-Central Rate (Tax) dated 28.06.2017 (as amended time to time) and the relevant port on of the same is reproduce as under: Sl.No. Chapter, Section, heading Description of service Rate (in%) Condition 1 2 3 4 5 7 Heading 9963 (Accommodation, food and beverage services) Supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or drink, where such supply or service is for cash, deferred payment or other valuable consideration, provided by a restaurant, eating joint including mess, canteen, whether for consumption on or away 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 hu
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =