TaxTMI 
TaxTMI 
2018 (9) TMI 1042
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....n No.46/2017 dated 14.11.2017 provides that restaurants can pay GST @5% (CGST-2.5% and SGST-2.5%), provided they do not avail input tax credit of the tax paid on input goods and services. Notification No.11/2017dated 28.06.2017, at Sl.No.35, provides for levy of GST @18% (CGST-9% & SGST-9%) on supply of unclassified services and the suppliers are entitled to take input tax credit in the circumstances where they pay output tax. 3. The Applicant contends that Notification No.46/2017 dated 14.11.2017 applies in circumstances where the applicant does not avail input tax credit. It does not prevent a restaurateur from paying tax at 18% (CGST - 9% and SGST - 9%) and availing input tax credit. Therefore the said notification is applicable only in circumstances where the supplier does not claim input tax credit and it would not apply in the circumstances if the supplier wants to avail input tax credit. If the restaurateur avail input tax credit, the transaction would get classified under Sl.No.35 of Notification No.11/2017 and chargeable to tax at 18% (CGST - 9% and SGST - 9%). Hence the restaurateur has the option of paying output tax @ 5% without availing input tax credit or paying outp....
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....of tax. FINDINGS & DISCUSSION: 6. We have considered the submissions made by the Applicant in their application for advance ruling as well as the submissions made by Sri. S Vishnumurthy, Chartered Accountant during the personal hearing. We also considered the issue involved, on which advance ruling is sought by the applicant, relevant facts & the applicant's interpretation of law. 7. The Applicant, filed the application dated 18.01.2018 seeking for advance ruling, seeking clarification as to "Whether the applicant is entitled to pay GST @ 18% (CGST @ 9% and SGST @ 9%) and claim input tax credit?" 8. The applicant is engaged in, as already discussed in Para 2, the business of running restaurants where food and non-alcoholic beverages are served. 8.1 The supply of food and beverage services is covered under Heading 9963 and Group 99633 as per Notification No. 11/2017- Central Tax (Rate) dated 28.06.2017 read with the Annexure to the said Notification. The said entries of the Annexure are reproduced below for reference: 71 Heading 9963 Accommodation, food and beverage services 72 Group 99631 Accommodation services 73 996311 Room or unit....
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....al Tax (Rate) dated 14th November, 2017 levying a central tax of 2.5% on restaurant services as provided by the applicant under the condition that credit of input tax charged on goods and services used in supplying the service have not been taken. The entry is reproduced below for ease of reference: (ii) against serial number 7,- (a) for item (i) in column (3) and the entries relating thereto in columns (3), (4) and (5), the following shall be substituted, namely:- (3) (4) (5) "(i) Supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or drink, where such supply or service is for cash, deferred payment or other valuable consideration, provided by a restaurant, eating joint including mess, canteen, whether for consumption on or away from the premises where such food or any other article for human consumption or drink is supplied, other than those located in the premises of hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes having declared tariff of any unit of accommodation of seven thousand five hundred rupees and above per un....
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....ical well -being services; and other miscellaneous services including services nowhere else classified). 9 - The various services covered under the scope of Heading 9997 as per the Annexure to Notification 11/2017 are reproduced below for reference. 700 Heading 9997 Other services 701 Group 99971 Washing, cleaning and dyeing services 702 999711 Coin-operated laundry services 703 999712 Dry-cleaning services (including fur product cleaning services) 704 999713 Other textile cleaning services 705 999714 Pressing services 706 999715 Dyeing and colouring services 707 999719 Other washing, cleaning and dyeing services nowhere else classified 708 Group 99972 Beauty and physical well-being services 709 999721 Hairdressing and barbers services 710 999722 Cosmetic treatment (including cosmetic or plastic surgery), manicuring and pedicuring services 711 999723 Physical well-being se....
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....rvices under Heading 9963 is 5% (CSGT 2.5% and SGST 2.5%) in terms of Notification 46/2017-Central Tax (Rate) dated 14th November, 2017.The competing entry claimed by the applicant is Serial Number 35 of Notification No. 11/2017-Central Tax (Rate) dated 28th June 2017. The applicable tax rate is 18% for this entry. The extract of the entry is reproduced in para 7.5 above. This entry is applicable for services which are not specifically described under any other entry in the Annexure. The services provided by the applicant are classifiable under Heading 9963 and such services covered under heading 9963 are squarely covered under serial number 7 of the Notification. As the services provided by the applicant are covered under a specific heading and the Notification carves out a specific rate of tax for that heading, the same shall be applicable to the applicant. Serial number 35 would qualify for invocation only in respect of services that do not find classification elsewhere. Therefore the applicant is covered by serial number 7 and not 35. 9.2 In this regard the applicant has argued that the words 'provided that' (refer para 7.3 above) give them an option to not to avail concession....