Take-away food sales without dine-in space are treated as restaurant service supplies for GST composition purposes.

Supply of food for take-away consumption without a sitting facility is treated as a supply of services, not manufacture of goods, because the essential character is food supplied to customers for consideration. Schedule II paragraph 6(b) of the CGST Act classifies supply of food or drink by way of or as part of any service as a service supply, and the absence of dine-in arrangements does not change that classification. On that basis, section 10(1)(b) of the CGST Act and the corresponding Uttar Pradesh GST provision apply the composition rate for restaurant-type service supplies. The activity was therefore eligible only for the restaurant-service composition levy.

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Issues: Whether manufacturing food for take-away sales without any sitting facility is to be treated as a restaurant service or as manufacture of goods for GST purposes, and the applicable composition rate.

Analysis: The activity involved supply of food articles for human consumption for consideration. Under section 7(1)(d) of the Central Goods and Services Tax Act, 2017, activities treated as supply under Schedule II fall within the scope of supply. Paragraph 6(b) of Schedule II treats supply of food or drink, by way of or as part of any service, as a supply of services. The absence of a sitting facility did not alter the character of the supply, because the essential element was supply of food to customers for consideration. On that basis, the activity was held to fall within the service category and not within manufacture of goods. Consequently, section 10(1)(b) of the Central Goods and Services Tax Act, 2017 and the corresponding provision of the Uttar Pradesh Goods and Services Tax Act, 2017 applied the composition rate for such service supplies.

Conclusion: The activity was held to be a supply of services in the nature of restaurant service, not manufacture of goods, and the applicable composition levy was 5% in aggregate.

Final Conclusion: The advance ruling answered the question against the applicant by classifying the take-away food business as a service supply eligible only for the restaurant-service composition rate.

Ratio Decidendi: Supply of food for consideration is a supply of services under Schedule II even without dine-in or sitting arrangements, and the tax treatment under composition depends on that service classification.

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