Food and drinks made in a restaurant will be subject to 5% GST whether consumed there, takeaway or doorstep deliveries, according to Gujarat’s Authority for Advance Ruling (GAAR). 

The Gujarat Authority Advance Ruling ruled this in the case of ‘Riddhi Enterprises’, the applicant which is a stand-alone restaurant. 

Chocolates do not qualify as “restaurant services”

The AAR panel during the hearing provided additional clarifications regarding the GST charge on over-the-counter supply of “readily available” food and drink items. These non-restaurant prepared items, including chocolates, chips, or bottled drinks, do not qualify as “restaurant services” and will therefore be subject to the applicable GST rate.

Along with a recent circular released by the Central Board of Indirect Taxes and Customs (CBIC) and Customs, the AAR bench referenced a 2017 GST council meeting in support of its decision. The notice which was issued last year in October clarified that takeaway and doorstep delivery services fall within the ambit of ‘restaurant services’.

Another such judgment was made by the Telangana GST Authority of Advanced Ruling (AAR) in 2017, which made it clear that ready-to-eat popcorn will be subject to an 18% GST. Another AAR had stated that a higher GST will be levied on pizza toppings. The Haryana body said that since toppings are not pizza, 18 per cent higher GST should be applied on them.