Supply through E - Commerce (Hybrid Order)

[Kaustubh Karandikar]

XYZ is having a sweet shop and restaurant in the same premises and adjacent to each other. W.e.f. 01.01.22, if goods are sold through e – commerce operator (ECO) from a restaurant then the ECO is required to charge GST @ 5% and not XYZ. If a customer is giving a single order for both the items viz. sold through restaurant as well as through sweet shop, what will be GST Rate and who will be liable to pay GST?

[Alkesh Jani]

Shri

Please refer Sl.No. 08, 09,&10 of Circular No.167/2021-GST dated 17.12.2021.

[Shilpi Jain]

The supplies which you treat as restaurant service will be liable in the hands of the ECO. Rest will be liable in your hands .

[CA Hemanth Kumar]

Circular No. 167/23/2021-GST

Would supply of goods or services other than ‘restaurant service’ through ECOs be taxed at 5% without ITC?

ECO is required to pay GST on services notified under section 9(5), besides the services/other supplies made on his own account.

On any supply that is not notified under section 9(5), that is supplied by a person through ECO, the liability to pay GST continues on such supplier and ECO shall continue to pay TCS on such supplies.

Thus, present dispensation continues for ECO, on supplies other than restaurant services. On such supplies (other than restaurant services made through ECO) GST will continue to be billed, collected and deposited in the same manner as is being done at present. ECO will deposit TCS on such supplies.

Whether sale of sweet at shop (having dine in facility) located in a restaurant will also be considered as restaurant services as there are some AAR states that sweet shops will also be considered as restaurant?

Experts can share their views.

AI Summary

GST liability for restaurant services: ECO responsible for tax on restaurant supplies while suppliers retain liability for non restaurant goods. Restaurant service supplies made through an e commerce operator are taxable in the hands of the ECO and must be charged and deposited by the ECO; supplies not falling within restaurant service remain taxable in the hands of the supplier, while the ECO continues to perform TCS and related collection/reporting obligations. Classification issues arise where sweet shop sales with dine in may be treated as restaurant services under some advance rulings.