Supply through E - Commerce

[Kaustubh Karandikar]

XYZ is having a sweet and namkeen shop. In the same premises and just adjacent to the shop, they are having restaurant services where tables and chairs are provided and the items available in the shop as well as the items exclusively for serving in the restaurant are served. Presently, XYZ is paying 5% GST on items served in the restaurant and for items served in the shop, the respective GST rate is charged. As per Notification No. 17/2017-Central Tax (Rate) dt. 28.06.2017 as amended by Notification No. 17/2021-Central Tax (Rate), dt. 18-11-2021 (w.e.f 01.01.2022), in case of supply of restaurant service other than the services supplied by restaurant, eating joints etc. located at specified premises, the tax shall be paid by the electronic commerce operator. As mentioned in the notification, specified premises means premises providing hotel accommodation service having declared tariff of any unit of accommodation above seven thousand five hundred rupees per unit per day or equivalent. In view of these changes w.e.f. 01.01.22, XYZ will continue to charge 5% GST or XYZ need not charge and E – Commerce Operator will charge 5% GST on items served in restaurant and XYZ will continue to charge respective GST rate for the items served in the shop? In my view, all items which are tagged as 5% GST will be considered as restaurant items and E - commerce will pay GST for such items to the authorities. For all other items, XYZ will continue to charge 5% GST. Views of the experts please.

AI Summary

GST Confusion: Should XYZ Charge 5% for Restaurant Items or Let E-commerce Handle It? Awaiting GST Council Clarification. XYZ operates a sweet and namkeen shop with an adjacent restaurant, currently charging 5% GST on restaurant items and respective rates for shop items. Due to amendments in GST notifications effective from January 1, 2022, there is confusion about whether XYZ should continue charging 5% GST for restaurant items or if the e-commerce operator should handle this. One respondent questions the feasibility of e-commerce operators providing restaurant services, suggesting XYZ continues charging the normal rate for shop items. Another respondent mentions that the GST Council is expected to clarify this issue.