Supply of Readily Available Food and Beverages (Not Prepared in Restaurant) Not Qualify as Restaurant Service and Liable to Applicable Rate of GST | AAAR

Case Details: Riddhi Enterprise, In re - [2025] 172 taxmann.com 268 (AAAR-GUJARAT)

Judiciary and Counsel Details

• B V Siva Naga Kumari, Member (CGST) & Rajeev Topno, Member (SGST)
• Chintan Vasa, CA for the Petitioner.

Facts of the Case

The appellant, a restaurant business, offers both food and beverages prepared within the restaurant and pre-packaged, readily available food and beverages for sale over the counter. The issue before the Advance Ruling Authority (AAAR) was whether the sale of these two types of supplies should be classified as ‘restaurant services’ under GST.

AAR Held

The Hon’ble AAAR held that food and beverages prepared in the restaurant and supplied to customers, whether consumed at the restaurant or taken away, qualify as ‘restaurant services’ under SAC 9963 31 and are subject to a 5% GST rate with no input tax credit, as per Sl. No. 7(ii) of Notification No. 11/2017-Central Tax (Rate), dated 28-06-2017. The court emphasized that ‘restaurant services’ involve the supply of food and beverages as part of a service. However, the sale of readily available food and beverages, not prepared in the restaurant and sold over the counter, was classified as a pure supply of goods, subject to the applicable GST rate for goods.

List of Cases Reviewed

• Riddhi Enterprise, In re [Advance Ruling No. GUJ/GAAR/R/2022/51, dated 30-12-2022](para 17) affirmed.
• Kundan Mishthan Bhandar, In re [2019] 105 taxmann.com 364 (AAAR-UTTARAKHAND) (para 16a)
• Gangaur Sweets, In re [2023] 146 taxmann.com 480 (para 16b)distinguished.