Restaurant service covers prepared food for dine-in, takeaway, or delivery, but not ready-made over-the-counter resales.

Food and beverages prepared in a restaurant and supplied for dine-in, takeaway, or delivery qualify as restaurant service under the applicable rate notification and circular, so GST applies at 5% without input tax credit. Ready-made food and beverages bought from the market and resold over the counter are not restaurant service because they are not prepared by the restaurant; they are treated as supply of goods and taxed at the applicable rate for goods. The ruling therefore distinguishes between prepared restaurant food and merely resold ready-made items, accepting the former and excluding the latter from restaurant service treatment.

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Issues: (i) Whether food and beverages prepared in the restaurant and supplied to customers for consumption in the restaurant or as takeaway qualify as restaurant service taxable at 5% without input tax credit. (ii) Whether ready-made food and beverages sold over the counter, not prepared in the restaurant, qualify as restaurant service.

Issue (i): Whether food and beverages prepared in the restaurant and supplied to customers for consumption in the restaurant or as takeaway qualify as restaurant service taxable at 5% without input tax credit.

Analysis: Restaurant service, as defined in the applicable rate notification, covers supply of food or drink by a restaurant for consumption on or away from the premises. The prepared and cooked items were made in the restaurant kitchen and supplied through dine-in, takeaway, or delivery. The clarification in the circular also treats takeaway and door delivery from a restaurant as restaurant service.

Conclusion: Yes. Food and beverages prepared in the restaurant and supplied to customers, whether consumed on the premises or taken away, qualify as restaurant service and attract GST at 5% without input tax credit.

Issue (ii): Whether ready-made food and beverages sold over the counter, not prepared in the restaurant, qualify as restaurant service.

Analysis: Items purchased ready from the market and resold over the counter are not cooked or prepared by the restaurant. Such supply is distinct from restaurant service, which is tied to the provision of food or drink by the restaurant as a service. The items are therefore treated as supply of goods and not as restaurant service.

Conclusion: No. Ready-made food and beverages sold over the counter, if not prepared in the restaurant, do not qualify as restaurant service and are liable at the applicable rate as goods.

Final Conclusion: The ruling accepts the tax treatment for prepared restaurant food and rejects the same treatment for ready-made over-the-counter items, leaving the applicant successful only on the first issue.

Ratio Decidendi: Food prepared by a restaurant and supplied for dine-in, takeaway, or delivery falls within restaurant service, but ready-made goods merely resold over the counter do not.

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