Packaged drinking water supplied with food in a restaurant is...

Packaged drinking water supplied with food in a restaurant is treated as part of composite restaurant service, so its value forms part of the transaction value even if billed separately. On that basis, GST applies at 5% to the total invoice value for restaurant service, subject to the condition that input tax credit on goods and services used in supplying the service has not been availed. The text also explains that the hotel premises will not be treated as "specified premises" where the previous financial year's room value does not exceed Rs. 7,500 per unit per day, with the result that the concessional restaurant rate continues to apply.

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