Composite restaurant supply includes packaged drinking water, attracting GST at the lower rate where premises are not specified premises.

Packaged drinking water supplied by a restaurant along with food was treated as part of a composite restaurant supply, so the entire transaction fell within restaurant service. The definition of restaurant service was read broadly to cover drinks supplied with food or other articles for human consumption, and the applicable GST rate notification applied 5% to restaurant service other than at specified premises. As the hotel premises did not meet the specified premises threshold because the relevant room tariff was below the prescribed limit for the relevant financial year, the combined supply of food and packaged drinking water remained taxable at 5%.

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Issues: Whether packaged drinking water supplied along with food in a restaurant forms part of restaurant service and attracts GST at 5% when the hotel premises are not covered as specified premises.

Analysis: The supply of food and drink in a restaurant was treated as a composite supply, with restaurant service constituting the principal supply. The definition of restaurant service was read broadly to include any drink supplied by a restaurant along with food or other articles for human consumption. The applicable rate notification provided GST at 5% for restaurant service other than at specified premises, while a higher rate applied only where the premises qualified as specified premises. On the facts placed before the Authority, the hotel did not satisfy the specified premises threshold, as the relevant room tariff value remained below the prescribed limit for the applicable financial year.

Conclusion: The supply of packaged drinking water along with food in the applicant's restaurant is part of restaurant service and is taxable at 5%, since the premises are not specified premises.

Final Conclusion: The applicant's invoicing of food and packaged drinking water as restaurant service was accepted, and the lower GST rate was held applicable on the combined supply.

Ratio Decidendi: Where drinks are supplied by a restaurant along with food as part of a composite restaurant supply, the entire transaction is taxable as restaurant service at the rate applicable to non-specified premises unless the establishment qualifies as specified premises under the rate notification.

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