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

Classification as Ready-to-Eat Food dictates GST treatment as taxable goods rather than as restaurant service or prepacked commodity. Packaged sandwiches, salads and juices supplied in institutional packs are not eligible for cloud kitchen restaurant service treatment nor treated as pre packed and labelled goods; they are to be classified and taxed as ready to eat food as a supply of goods. Supplying at small retail scale does not alter this classification.