GST rate query

[Jinal S]

Dear Experts,

Need guidance on below-

The Company is into manufacture of food products like sandwiches, salads, fruit juices and vegetable juices.

It supplies these products in institutional packs to corporates & at times to cafes, supermarket for further sale.

What should be the applicable gst rate ?

1. Does it get covered under cloud kitchen and can take benefit of reduced rate of restaurant service. (5%)

2. Will it be taxed as ' pre packed & labelled ' @12%

3. Will it classify as ready to eat (HSN 2106) @18%

Will the opinion change if company supplies same in retail at a very small scale.

Thanks

[KASTURI SETHI]

1. Does it get covered under cloud kitchen and can take benefit of reduced rate of restaurant service. (5%)     :  NO

2. Will it be taxed as " pre packed & labelled " @12%  : NO

3. Will it classify as ready to eat (HSN 2106) @18%  :  YES

Will the opinion change if company supplies same in retail at a very small scale ? : NO

           Most of the decisions of AAR are in favour of the department.

[Shilpi Jain]

This supply will not be in the nature of services since the goods are prepared and delivered.  It would be supply of goods. Though the cloud kitchen circular clarifies differently.

You need to check how different is your transaction from the cloud kitchen example (apart from the fact that it is not many individual customers).

AI Summary

Food Manufacturer's GST Rate Clarified: Ready-to-Eat Products Taxed at 18%, Not Cloud Kitchen 5. A company manufacturing food products like sandwiches, salads, and juices seeks guidance on the applicable GST rate. They supply these items to corporates, cafes, and supermarkets. The inquiry is whether these products fall under the cloud kitchen category with a 5% GST, as pre-packed and labeled at 12%, or as ready-to-eat at 18%. Expert responses indicate the products are classified as ready-to-eat with an 18% GST, regardless of scale or retail supply. The discussion highlights that the supply is of goods, not services, and advises comparing the transaction to cloud kitchen criteria.