Regarding Home Delievery Service under restaurent

[VIRENDER KUMAR]

Please confirm of GST Rate for home delievery service on regular and composition dealer

Virender Kumar

9818109055

[KASTURI SETHI]

Definition of 'Restaurant Service' given in para 4(xxxii) of Notification No.11/17-CT(Rate) dated 28.6.17 as amended up to 26.3.20 includes/covers home delivery service also. Rate of GST is 5% .See serial no.7(ii) of Notification No.11/17-CT(T) dated 28.6.17. For composition Scheme 6% (3% +3%).

[Shilpi Jain]

In my view home delivery service of food would be a supply of goods. Though the GST Council is of a different recommendation to treat it as a supply of goods.

This also becomes evident from the the changes recommended by the 45th GST council meeting where the cloud kitchens are sought to be taxed at 5% as restaurant service.Please go to the article in the below link

[KASTURI SETHI]

Madam Shilpi Jain,

Please post web-link of the article referred to.

[Shilpi Jain]

I had posted the link but I think it must have been deleted by TMI since it is a link of another website. You could Google supply of food with my name you would be able to get the article

[KASTURI SETHI]

Dear Querist,

It is a composite supply. Principal supply is Restaurant Service (Home Delivery Service). It is worthwhile to go through the following decision of AAAR, Uttarakhand.

2019 (5) TMI 312 - APPELLATE AUTHORITY FOR ADVANCE RULINGS, UTTARAKHAND IN RE : KUNDAN MISHTHAN BHANDAR

[Shilpi Jain]

As per the clarification issued today by a circular, cloud kitchens which only prepare food and do home delivery are also considered to be falling under restaurant service of 5% merely because the explanatory notes to the HSN include food delivery services!!!

[KASTURI SETHI]

Otherwise also, the decision of AAAR Uttarakhand in respect of Kundan Mishtan Bhandar was accepted by the department. It was not reviewed as per status in EXCUS DVD.

[Shilpi Jain]

AARs do not many times depict the correct legal position. They are very popularly referred to as Adverse Advance Rulings.

We have also noted contradictory rulings for the same issue.

Department needs to look do a research on the settled legal precedents and amend law or amend the circular to avoid disputes/litigations.

AI Summary

Restaurant service classification makes home food delivery subject to a reduced GST rate and composition levy.
Home food delivery is treated as Restaurant Service for GST and taxed under the reduced restaurant-service rate, with a separate composition levy for composition dealers. The supply is characterised as a composite supply whose principal element is restaurant service, a position supported by the AAAR Uttarakhand decision in Kundan Mishtan Bhandar and reflected in notifications and circulars treating cloud kitchens and delivery as restaurant service.