Same premises with a Restaurant and Sweets sale unit – GST Implication – Whether composite Supply?

In case of sweet shop cum restaurant, services from restaurant is a principle supply which provides a bundled supply of preparation and sale of food and serving same and, therefore, it constitutes a composite supply.

Where applicant has a sweet shop in ground floor and a restaurant in first floor of same building, supply shall be treated as supply of service and sweet shop shall be treated as extension of restaurant and activity of applicant would come under purview of ‘restaurant services’ falling under Heading 9963 attracting GST @ 5% and applicant cannot avail credit on GST paid on goods and services used in its said activity in terms of Notification No. 11/2017-Central Rate (Tax), dated 28-6-2017.

(AAR- UTTARAKHAND)AUTHORITY FOR ADVANCE RULINGS, UTTARAKHAND

Conclusion:

It is held that Supply of pure food items from sweetshop-cum-restaurant treated as supply of service: AAR