TaxTMI 
TaxTMI 
2026 (5) TMI 783
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....ncing the tax liability or reducing the amount of admissible input tax credit shall be made, unless the appellant has been given an opportunity of being heard. 2. Under Section 103(1) of the Act, this Advance ruling pronounced by the Appellate Authority under Chapter XVII of the Act shall be binding only (a) on the Appellant who had sought it in respect of any matter referred to in sub-section (2) of Section 97 for advance ruling; (b) on the concerned officer or the jurisdictional officer in respect of the Appellant. 3. Under Section 103 (2) of the Act, this advance ruling shall be binding unless the law, facts or circumstances supporting the said advance ruling have changed. 4. Under Section 104(1) of the Act, where the Appellate Authority finds that advance ruling pronounced by it under sub-section (1) of Section 101 has been obtained by the appellant by fraud or suppression of material facts or misrepresentation of facts, it may, by order, declare such ruling to be void ab-initio and thereupon all the provisions of this Act or the rules made thereunder shall apply to the appellant as if such advance ruling has never been made. At the outset, it is m....
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.... b. The applicant is eligible to avail ITC on the inward supply of goods/service as discussed in para 6.16 above. 3.3 The Authority for Advance Ruling (AAR) had arrived at the above decision based on the following discussions held therein, • The appellant had an agreement with their corporate clients for supply of food in the form of breakfast, lunch and dinner. The appellant did not cook the food but engaged third party kitchens under agreement to supply food. • The appellant got the food prepared as per the menu mutually agreed upon by the applicant and their client, arranged for transportation of food from the kitchen location to the clients' location, ensured quality standards of the food prepared in the third-party kitchens, enforced maintenance of hygiene at the kitchen location where the food is prepared. • The appellant is not just trading in packed/branded food items, they undertake pickup and delivery of fresh cooked food at the doorstep of the client, they are also involved in providing an array of logistics services including transportation and ensuring quality/ hygiene; the activity, per se, of the applicant cannot be con....
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....; these clauses merely ensure proper performance of the sale. * That the AAR has ignored the dominant intention test as held by the Hon'ble Supreme Court in BSNL v. Union of India, wherein Hon'ble Supreme Court says that a transaction must be examined based on its dominant intention and in the present case the dominant intention of the recipient is purchase of food. The appellant also adds that they do not cook the food, do not serve it; neither provide manpower nor provide hospitality or catering services and that delivery is merely a means to effect the sale and does not alter the dominant nature of the transaction. * That classification of the activities undertaken by them under supply of services under Heading 9963 is incorrect as the Appellant's activity lacks the essential elements of a service like human intervention at the point of consumption, catering. The applicant also states that mere aggregation and delivery of goods cannot be classified as a service and the classification under Heading 9963 is erroneous. * That the impugned order failed to appreciate revenue neutrality and GST design as the Appellant has discharged GST on the supplies made ....
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....tems are directly sent to the customers from the respective kitchens. The AR said that delivery is done by third party delivery service providers and they don't own any vehicles for delivery of the food items. The AR also added that there is no value addition at their end, the food procured from the kitchen is as such provided to the customers. 4.3 Further, the AR informed that their customers request audit documents once in three months for quality assurance and the appellant does audit of the kitchens and submit the audit documents to their customers. 5. Discussions and Findings: 5.1 We have carefully examined the submissions made by the Appellant in their advance ruling application and the submissions made during the personal hearing. We have also considered the issue involved, the relevant facts and the Appellant's submission / interpretation of law in respect of question on which the advance ruling is sought. 5.2 We note the Appellant's claim that they are engaged in supply of food and beverages to their corporate clients and that they neither prepare food nor serve them at the client's canteen. The appellant procures the food from third party sources in a packed c....
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....nt, the appellant deploys a service person for serving - per person for Lunch and Dinner. In the light of the said entry in the service agreement, the stand taken by the appellant that they are not involved in serving the food at the clients' premise gets diluted. 5.7 It is to be noted that the GST law deals supply of food differently from other goods. Para 6 (b) of Schedule II to the CGST Act, 2017 specifically treats supply of food as a supply of service. 5.8 The relevant portion of the said schedule is reproduced below for reference: (b) 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 any drink (other than alcoholic liquor for human consumption), where such supply or service is for cash, deferred payment or other valuable consideration. Schedule II of the CGST Act, 2017 mentions the activities or transactions to be treated as supply of goods or supply of services. From entry 6(b) it is seen that the supply of food in any manner whatsoever is to be treated as a supply of service. 5.9 The appellant raises an issue for clarification as to whether supply of food by ....
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....made for a consideration by a person in the course or furtherance of business Section 7(1A) of the CGST Act, 2017 states that (1A) where certain activities or transactions constitute a supply in accordance with the provisions of sub-section (1), they shall be treated either as supply of goods or supply of services as referred to in Schedule II. 5.12 The appellant undertakes supply of food as sale for a consideration in the course of their business. Therefore, the activity undertaken by the appellant constitutes a supply. Now, whether they shall be treated as a supply of goods or supply of services needs a reference to Schedule II, as is envisaged under Section 7(1A) of the CGST Act, 2017. 5.13 Para 6 of Schedule II to CGST Act, 2017 states that 6. Composite supply The following composite supplies shall be treated as a supply of services, namely:- (a) works contract as defined in clause (119) of section 2 ; and (b) 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 any drink (other than alcoholic liquor for human consumption), whe....
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....ply, by way of or as part of any service of goods, being food or any other article for human consumption or any drink, at Exhibition halls, Events, Conferences, Marriage Halls and other outdoor or indoor functions that are event based and occasional in nature. (xxxiv) 'Hotel accommodation' means supply by way of accommodation in hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes including supply of time share usage rights by way of accommodation. From the above, the following could be deduced, i.e., i. The said activity of the Applicant would not be covered under 'outdoor catering service' as the applicant is not involved in the preparation of food, and as the same is not an event based or an occasional service. ii. It is quite obvious that the service in question, will not be covered under 'hotel accommodation service'. iii. Restaurant service covers only services provided by restaurant,. mess or canteen, thereby, the activity undertaken by the Applicant under a contract to Corporates would not be covered under 'restaurant service'. 5.16 As the service carried out by the Applic....
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....hey have a digital platform through which their corporate clients order food delivery. Therefore, they cannot be treated at par with the ECOs. 5.18 The appellant relied on various AARs to drive home their argument. It is to be pointed out that Advance Rulings decisions in respect of an applicant is applicable to the said applicant alone, but the rulings have a persuasive value to them. We find that the food supplied to corporates on a continuous basis has been treated as a principal supply. The activity undertaken by the appellant does not fall under any of the category listed from SI. Nos. 7(i) to 7(v) of Notification No. 11/2017-CT(Rate), dated 28.06.2017, as amended, and therefore, entry 7(vi) was resorted to, being the residual entry of the said Notification. 5.19 The appellant's argument that the AAR has placed undue reliance on agreement is not correct. It is to be noted that the GST law is based on documentation. Also, supply of service being intangible, a need of relying on the agreements becomes more essential. 5.20 The appellant argues that a transaction must be examined based on its dominant intention as held by the Hon'ble Supreme Court in the case of BSNL V Un....