RESTAURANT sERVICE tAXABILITY

[YUWRAJ KOTHARI]

RESTAURANT service providers are not permitted to supply through e-commerce operator.But it is seen that restaurants supply through Zomato,Swiggy etc What could be the consequence. Is there any provision not to opt for 5% but pay full tax and claim ITC. Further these Restaurants also incur URD purchass of taxable goods.Are they supposed to pay tax on URDs under RCM without claim for ITC. Kindly clarify Thanks in advance.

AI Summary

GST on Restaurant Services via Apps: 5% Rate Without ITC; RCM Revised; URD Purchases Allowed Without ITC Claim. A query was raised about the taxability of restaurant services under GST, specifically regarding the supply through e-commerce platforms like Zomato and Swiggy. The inquiry questioned the consequences of such supplies and whether restaurants could opt out of the 5% GST rate to pay full tax and claim Input Tax Credit (ITC). Additionally, it addressed whether restaurants need to pay tax on unregistered dealer (URD) purchases under the Reverse Charge Mechanism (RCM) without claiming ITC. The response clarified that the GST rate for restaurant services is 5% without ITC, and restaurants can purchase from URDs. The RCM provisions have been revised under a new section to be notified.