TaxTMI 
TaxTMI 
2025 (12) TMI 984
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....8. 1.1 At the outset, we would like to make it clear that the provisions of the Central Goods and Services Tax Act, 2017 (the CGST Act, for short) and the West Bengal Goods and Services Tax Act, 2017 (the WBGST Act, for short) have the same provisions in like matter except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean reference to the corresponding similar provisions in the WBGST Act. Further to the earlier, henceforth for the purposes of these proceedings, the expression 'GST Act' would mean the CGST Act and the WBGST Act both. 1.2 The applicant owns and manages hotels and resorts. They offer variety of services to their customers such as rooms and suites, banquets, dinning, spa etc. 1.3 The applicant has made this application under sub-section (1) of section 97 of the GST Act and the rules made there under raising following questions vide serial number 14 of the application in FORM GST ARA-01: (i) What is the rate of tax applicable on supply of Carbonated Drinks (Aerated Water) when they are supplied independently and not as composite supply in restaurant? In ot....
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.... the customers demand tax @ 18% as charged on other restaurant services (under HSN CODE-996331). Till date we are treating aerated water as an individual supply and not as a composite supply, hence we are charging the rate applicable to such supply of soft beverages as per Notification no. 01/2017-C.T. (Rate) dated 28.06.2017 in case of both the types of supplies stated above. 2.3 However, the applicant asserts that when aerated water is supplied individually or as part of a meal it should be treated as composite supply subject to the tax rate of 18%. He would like to bring attention, Section 7 of CGST Act, Supply is defined under Section 7 of the CGST Act 2017 and the same is reproduced below for reference: 7.(1) For the purposes of this Act, the expression 'supply" includes- a) all forms of supply of goods or services or both such as sale, transfer, barter, exchange, license, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business,. b) import of services for a consideration whether or not in the course or furtherance of business; and c) the activities specified....
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....arious services such as accommodation, dining, etc. In the situation at hand, the question involves the supply of Soft beverages/aerated water in conjunction with food/meal or as a standalone product at the restaurant. In their menu for restaurant has 'aerated water' and 'soft Beverages' i.e., any guest who comes to the restaurant can have aerated/ soft beverages alone also as these are in the menu of the restaurant. When a guest (resident or non-resident) comes to the restaurant and orders from the menu either soft beverages or aerated water, it involves supply of goods (soft beverages/aerated waters) and supply of services by the restaurant. In this case both the supplies are taxable. The serving of any items on the menu involves the supply of the items along with the use of the facilities/ staff of the restaurant. These two are naturally bundled and supplied in conjunction each other and hence is a composite supply as per Section 2(30) of the Act. 2.5 Further, as per para. 6(b) of Schedule Il to the CGST /SGST Act, the composite supply of goods being food or any other article for human consumption or any drink (other than alcoholic liquor for human consumption....
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....-counter sales of sealed bottles/cans of aerated beverages. • Customers enter to avail a dining experience; consumption takes place within the premises (Restaurant dining area/room service). • The restaurant provides ambience, seating, cutlery, glassware, waiter service, and customised preparation of drinks. • Hence, supply is never in the nature of "retail shop sale." 2.9 Actual Process of Supplying Aerated Beverages When a customer orders Coke or any other aerated beverage, the process is as follows: 1. Preparation Area: The sealed bottle/can is taken to the kitchen counter. 2. Opening and Service: Staff open the beverage and pour into restaurant glassware. 3. Customisation: Depending on customer preference, the following may be added: • Ice cubes, lemon slice, sugar syrup, or masala. • In many cases, the beverage is used as an ingredient for preparing value-added drinks such as Masala Coke or Fresh Lime Soda. Example - Masala Coke (per serving): • Coca-Cola (200 ml), Lemon juice (10 ml), Black salt (¼ tsp), Roasted cumin (¼ tsp), Chaat masala (&fr....
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....f or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (other than alcoholic liquor for human consumption), where such supply or service is for cash, deferred payment or other valuable consideration. Notification No. 11/2017 - Central Tax (Rate) dated 28.06.2017 (as amended): "Restaurant service" means supply, by way of or as part of any service, of goods, being food or any other article for human consumption or any drink, 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. Circular No. 164/20/2021-GST dated 06.10.2021: It is clarified that the supply of food or beverages by a restaurant, whether for consumption on the premises or by way of takeaway or door delivery, is to be treated as supply of service under heading 9963 and taxed accordingly. Therefore, supply of aerated beverages within the restaurant is classifiable as Restaurant Service (SAC 996331) and taxable at 18% with ITC. 2.12 Judicial / Advance Ruling Support ....
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.... taxable at 28% + cess). Restaurant service (SAC 996331), taxable as composite supply of service at 18% with ITC. Judicial position Treated as supply of goods. Supported by rulings in Kundan Misthan Bhandar (AAAR), Gangaur Sweets (AAR), and MFAR Hotels (AAR) - cold drinks served in restaurants form part of restaurant service. 3. Submission of the Revenue 3.1 The concerned officer from the revenue has not expressed any view on the merit of the issue raised by the applicant. 4. Observations & Findings of the Authority 4.1 We have gone through the records of the issue as well as submissions made by the authorized representatives of the applicant during personal hearing. The Revenue has not given any view in this respect. 4.2 As per the statement furnished, the applicant being an hotelier offers variety of services such as accommodation in rooms and suites, banquets, dining, spa etc. The applicant has a restaurant in the hotel premises as stated during personal hearing. The primary intention of the applicant's customers is to avail a complete dining experience which includes consumption of Food & Beverages including Aerated Beverages in the said restaurant. O....
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....ice is for cash deferred payment or other valuable consideration shall be treated as a supply of services. The applicant states that his menu card for restaurant includes 'aerated beverages' and 'soft beverages'. It means that any guest who comes to the restaurant can have aerated beverages / soft beverages alone also as these are in the menu of the restaurant. When a guest (a resident or a non-resident) comes to the restaurant and orders from the menu either soft beverages or aerated beverages, it involves both supply of goods (soft beverages / aerated beverages) and supply of services by the restaurant. In this case both the supplies are taxable. The serving of any items on the menu involves the supply of the items along with the use of the facilities/ staff of the restaurant. These two are naturally bundled and supplied in conjunction with each other and hence is a composite supply as per Section 2(30) of the Act. Thus, as per the applicant's understanding the supply of aerated beverages in the restaurant whether as a supply along with supply of food or supply of only the aerated beverages, it should be considered as a Composite Supply in the restaurant ind....
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....r, fruit flavour, orange flavor etc.), acids (like citric acid to add a sour taste and help preserve the drink) etc. Carbonated drinks are available in the market in bottles and cans. It may be prepared in restaurants as per the specifications of the customers. Aerated Beverages (or Carbonated Drinks) can be classified as drink as referred to in the definition of restaurant service ibid. 4.5 From the statement of facts, submissions during the course of personal hearing and the additional written submission of the applicant the following points are noted: A) The applicant runs a restaurant from the premises of the hotel. B) The hotel of the applicant is a 'specified premises' for the ongoing financial year. C) The restaurant has no separate take away counter. D) The restaurant services are enjoyed by both the guests of the hotel and walk in customers. E) People coming to the restaurant can place order from the menu card provided by the restaurant for that purpose. The menu card contains food items and beverages including aerated beverages. F) People may place order for food and aerated beverages along with food. Sometimes i....
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....he customers coming to the restaurant place order for aerated beverages only. It is learnt from the applicant's representative that the applicant has no separate 'take away' counter. Whatever is ordered by the customers, it is to be consumed by them in the restaurant itself. 4.7 In the case in our hand the applicant has submitted that the following events occur when an order for aerated beverages (be it with other food or without any food) is received: The sealed bottle/can of the particular beverage is taken to the kitchen counter. Staff opens the beverage and pours into restaurant glassware. Depending on customer's preference ice cubes, lemon slice, sugar syrup, or masala are added to the beverage. In this way value-added drinks such as masala coke or fresh lime soda are prepared by kitchen staff. Preparation of per serving of masala coke requires Coca-Cola (200 ml), Lemon juice (10 ml), Black salt (¼ tsp), Roasted cumin (¼ tsp), Chaat masala (¼ tsp), Ice cubes (4-5 pcs). Preparation of per serving of fresh lime soda requires Lemon juice (30 ml), Sugar syrup (15 ml), Soda water (150 ml), Ice cubes (5-6 pcs). The drink thus prepared is served at th....