AAR Classifies Outlet-Prepared Food as Restaurant Service for Dine-In and Takeaway

Case Details: Cremeux Bakeries (P.) Ltd., In re - [2026] 187 taxmann.com 251 (AAR – Goa)

Judiciary and Counsel Details

• Smt. Lakshmi Radhakrishnan & Vishant S.N. Gaunekar, Member

Facts of the Case

The applicant, engaged in manufacturing bakery products such as cakes, pastries, sandwiches, biscuits and breads, operated multiple retail outlets from which fully manufactured products were sold directly to customers. Certain other items, such as pizzas, pastas, salads, and shakes, were prepared or assembled at the outlets after receiving customer orders, using semi-finished ingredients supplied by the factory. The applicant sought an advance ruling regarding the classification of ready-made bakery products, the taxability of outlet-prepared food items and whether different GST treatments could simultaneously be adopted for goods and restaurant services from the same premises by maintaining separate accounting records. The Authority examined the provisions of the CGST Act as well as the clarifications contained in Circular No. 164/20/2021-GST to determine the appropriate GST treatment

High Court Held

The Authority held that bakery products manufactured at the factory and supplied through outlets without any further cooking or preparation constitute a supply of goods and would attract GST according to their respective HSN classification. However, items such as pizzas, pastas, salads and shakes prepared or blended at the outlet upon customer order would qualify as restaurant services irrespective of whether consumed on the premises or taken away. It further observed that both categories of supplies could coexist from the same premises, provided separate invoice series and proper accounting records are maintained, particularly for compliance with input tax credit reversal provisions.