Classification of gst for our shop

[Pavan Mp]

Hello

We have a juice and ice-cream shop where in we prepare everything in house. No packed product. Served to customer on order basis who will consume in shop only. Please can you specify to which category does our shop belongs

[Sanjeev Agarwal]

Based on the facts provided, your business would generally fall under the restaurant service category under GST, not as a manufacturer or supplier of packaged ice cream.

Business Profile

From your description:

• You prepare juice and ice cream entirely in-house.

• No branded or pre-packed products are sold.

• Products are prepared/served only on customer order.

• Customers consume them within the shop.

• There is no sale of packaged ice cream for takeaway as a retail product.

GST Classification

Your establishment is best classified as a restaurant/eating establishment supplying restaurant service, because the dominant supply is food and beverages prepared and served for immediate consumption.

The supply of:

• Fresh fruit juices,

• Freshly prepared ice cream,

• Sundaes,

• Milkshakes,

• Falooda,

• Desserts prepared in-house,

served to customers for consumption in the premises, is generally treated as restaurant service.

Why it is not a packaged ice cream outlet

It is not akin to:

• a retailer selling packaged ice creams,

• a supermarket,

• a distributor of branded ice creams,

• or a manufacturer supplying packaged goods.

Those businesses supply goods.

Your business supplies prepared food/beverages as part of restaurant service.

GST implications

If your establishment qualifies as a restaurant:

• The applicable GST rate is generally 5% (2.5% CGST + 2.5% SGST) on restaurant services.

• Input Tax Credit (ITC) is generally not available on inputs and input services used for providing such restaurant services (subject to statutory exceptions).

Important qualification

The position may change if you also:

• manufacture ice cream in-house and sell it in sealed tubs or containers for takeaway,

• supply through distributors,

• make wholesale supplies,

• or separately sell packaged products.

In such cases, part of your business may constitute a supply of goods, attracting different GST treatment.

To confirm the classification conclusively

Please clarify:

1. Do you provide seating and table service, or is it a takeaway counter?

2. Do you also sell sealed takeaway tubs of your own ice cream, or is every serving scooped/prepared fresh on order?

3. Do you sell through Swiggy/Zomato as prepared food items only, or do you also sell packaged products?

These facts will determine whether the entire business qualifies as restaurant service or whether there is a mixed supply involving both restaurant services and sale of goods.

[Pavan Mp]

Hello

Thanks for the response.

As you have asked for table or seating arrangement, we dont have table service only seats to consume when ordered.

Freshly in the sense will be prepare in advance to freeze and will be in container not in any packed material. No sealed takeaways.

No online orders.

[Sanjeev Agarwal]

Based on the facts provided, your establishment is not merely an ice cream parlour selling pre-manufactured ice cream. Rather, you prepare ice cream and juices in-house using raw materials, store the ice cream in bulk containers (without retail packing), and serve customers only upon order. There is no sale of sealed or pre-packed ice cream, no online delivery, and no takeaway in packaged form. Customers consume the products at the outlet using the seating provided, although no table service is offered.

The absence of table service is not by itself determinative. Under GST, many quick service restaurants, cafe s and self-service food outlets provide only counters and seating, yet are treated as restaurants. The essential consideration is whether the supply is of food or beverages prepared and served for immediate consumption as part of a restaurant service.

Your business differs from a typical ice cream parlour that sells branded or pre-manufactured ice cream procured from third parties. In your case, the ice cream is manufactured in-house and served in cups, cones or dishes directly to customers for immediate consumption. Similarly, fresh juices are prepared and served on demand.

Accordingly, there is a reasonable basis to contend that your establishment is an eating establishment providing restaurant service rather than merely supplying packaged goods.

However, the issue is not entirely free from doubt. CBIC has clarified that an ice cream parlour selling already manufactured ice cream is supplying goods and not restaurant service. While your facts are distinguishable because the ice cream is manufactured by you and not purchased from third parties, the circular does not expressly deal with such a situation. Therefore, the matter carries some interpretational risk.

Before adopting a final GST position, it would be advisable to review your GST registration, HSN/SAC classification, GST rate presently charged, and ITC position. A considered legal opinion should also evaluate the CBIC clarification and relevant judicial precedents to determine whether your in-house manufacturing process is sufficient to distinguish your business from a conventional ice cream parlour. This approach will ensure that the GST treatment adopted is legally sustainable and capable of withstanding departmental scrutiny.

[Sadanand Bulbule]

I endorse the reply.

[KALLESHAMURTHY MURTHY K.N.]

Sir,

Preparing and selling ice cream and juice directly to customers on the same premises functions as a food service. As per the query, there are no B2B sales. No packing supply.

As per Notification No. 9/2025-Central Tax (Rate) dated September 17, 2025, effective from September 22, 2025, the Goods and Services Tax (GST) rate on ice cream and edible ice under HSN Code 2105 is reduced from 18% to 5%, [141. 2105 00 00 Ice cream and other edible ice, whether or not containing cocoa ]

So the above supplies fall under SAC -9963, and the rate of tax is 5% without ITC.

[Sanjeev Agarwal]

The establishment is appropriately classified as a restaurant/food and beverage service provider under SAC 9963. The in-house preparation and direct serving of ice cream and juices to customers for consumption at the same premises constitutes food service, notwithstanding that the establishment operates without table service. The applicable GST rate is 5% (2.5% CGST + 2.5% SGST), without ITC.

This classification is consistent with the actual business model, where there is no supply of sealed/pre-packed ice cream, no B2B/wholesale activity and the products are prepared and supplied directly to retail customers for consumption at the premises.

[Shilpi Jain]

Do u have seating space in your shop of its only pick and go? If no seating then it will treated as a supply of goods and relevant GST rate will apply.

If seating place is available and customers are served, then it will be in the nature of supply of restaurant service taxable at 5%

AI Summary

GST classification of in-house ice cream outlets depends on immediate consumption, seating, packaging practices, and the actual supply model.
GST classification may treat an outlet preparing juices and ice cream in-house and serving customers for immediate on-premises consumption as restaurant service under SAC 9963. The position is supported by seating, direct service on order, and absence of sealed products, wholesale supplies, online deliveries, or packaged takeaway sales. Restaurant service is described as taxable at 5 per cent without input tax credit. Classification may change where sealed takeaway containers, packaged retail products, distributor supplies, or wholesale sales are involved. In-house manufacture may distinguish the activity from an ice cream parlour selling already manufactured ice cream, but interpretational risk remains.