BEFORE THB AUTFIORITY FOR ADVANCE

RULINGS FOR TI-IE STATE OF UTTARAKHAI

(Goods and Services Tax)
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Present:
Shri Vipin Chanrlra (Mernber)
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Shri Amit Gupta (Mcmbcr)
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The 22"'t day of October.,20lg
No: 0()/20tg_19
Ruf ing
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Applicarion No: 0g/201B_t 9
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A pp licant
i M/s. KuncJalr Misthan gha,r,Jon Subl, sh
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Rarrlragar.
Present for the Applicant
J Arsnwalya Shanra, Advocate
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Preserrt 1'or the Jurisdictional bfficer
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Date of receipt oruppti*tion"rft"; 26.u6./.u l6
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Ser.r,iccs I ax Act. 20 7, arr a ppcal
irr
- aclvance ruling constilutecj Lrrrder I )clt0n-'99 of^
the Ufiara
ttaral<hand Goods arrd Services Tax
Act. 20 | 7, ithirr a period of 30 clays frorn
th is. order'.
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the datr of serviice of

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 1. This is an application under Sub_Section (1)
of Sectio 97 of the
CGST/SGST Act, 2017 (herein after referred
to AS Act) a the rules
made thereunder fired by, M/s, Kundan Misthan
Bhand r, Subhash
Market, Ramnagar (Nainital) Uttarakhand, primaril,,,
en ged in the
business of suppl,l,ing goods & services botjr
and seeks n advance
ruling on the question, details of which given
below as:

(al whether supply of pure food items such as weetmeats,

namkeens, cold drink and other edible items
from sweetshop
which also runs a restaurant is a transaction
of su ly of goods
or a supply of service;

{bf what is the nature and rate of tax applicable to t e following

items supplied from ground floor of sweetsho
, a. in rn'hich
, restaurant is also iocated on the first floor. and hether the
applicant is entitled to ciainr benefit of input
tax redit with
respect to the same:

(i) Sweetmeats, namkeens, Dhokla etc commonl

known as
snacks, cold drinks, ice creams and other edib
items;
(ii) Ready to eat (partially or fully pre_cooke dlpa
supplied from live counters such as jalebi, ch ) irems
bhatura
and other edible items:

(iii) Takeaway order of sweetmeats or namkeens

a person
sitting in the restaurant 'of a sweetshop hen such
products are not consllmed within the prem
es of the
applicant but are takeaway

2. Advance Ruling under GST mear-rs a decision

provided by th authority
or the appellate puthority to an applicant on ma*ers
or on questions
specified in sub section (2) of section 9T or sub section (1)
of tion 100
rn relation to the suppiy of goods or services or
both beins u'cl rtaken or
pr-oposecl to bc uuclc.rtal<en l:r, the altitlicant.
,a
I

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3. In the present rc se applicant
has sought advance ruling
acnvrty of the a hether the
icant is supply of goods or
supply of ..ru] s, nature &
rate of tax on I ms and
"input tax credit.
Therefore, in t s of
Section 9T(2) (d), (e) said
& (g) of Act, the present applicatio
admittEd for thE uestions is hereby
supra in terms of Section gZ(2)
provisions of saifl I Act. The
tion are reproduced below :

Section 91 The questio:n on which the

une"er thts,lA ad.uance
shaU be in respect of,_

14,1 ctass{tqa of any good.s or seruices

or both;
-'-t
.
(b) appticaQit of a notification issried und.er
,4ct; the prouisi

(c) determiqq n of time and ualue of supplg

both; 6l gooas
(d) admissihi of input tgx credit of tax paid
been paid.; )
or dee

(e) deterrylnqti of the liabilttg to pay +^ ^-, ang good.s

^. urL
Lu.\
or both;'. seru.tces

(f) whether ap tcant is required. to be registered.;

'{g) whether dn
to anA goods o !:!::y!",o, tlt:irlg a.mounts
done by the"appricant wit
respect
Eoods or serui :":f:: !3t,n
or both, u.tithin the
to or risutts in a
'LLO
LT L up,ely of
.meaning of that term.

4. Accordingly opportrpn ty,of personal

hearing was granted to the
on 05.09.2019. a plicant
Shri ishwarya sharma (Advocate)
appeared for rsonal
hearing on 05.09:40 B and
submitted documents describing
exact nature of wor[< therein
tng undertaken. Nobody appeared
of Revcnue for the hca ing from side
5. In the present application, applicant has requested for advance ling on
different issues which are no\ / discuss as under:

5.1 Whether suppllr of pure food items such as sr,r'eetmeats, natrrl< ens, cold
drink ar-rd other edible items from a sweetshop which ^l runs a

restaurant is a transaction of supply of goods or a supply of SC

A. Before coming to any conclusion, first we have to go th ugh the

relevant provisions of law'and the same are covered under s tion 2 of
the Act ibid. The relevant portion of the same extracted an read as
under:

(30) "composite supply" means a supply made by a taxab person

to a recipient consisting of two or more taxabie suppiies of goods or
services or both, or any combination thereof, fuhich are naturally
bundled and supp'lied in conjunction with each other in the ordinary
course of business, one o[ which is a principal supply;

(52) "goods" means every kind of

movabie property ot ei than
money and securities but includes actionabie claim, growi g crops,
grass and things attached to or forming part of the land which agreed
to be severed before supply or under a contract of supply;

(74) "mtxed supply" means two or more individual supplies o goods or

services, or any combination thereof, made in conjunction ith each
other by a taxable person for a single price where such suppl does not
constitute a composite suPPiY

(90) "principal supplyt' means the sr-rpply o'f goods or servi CS which
constitutes the predominant elemenl of a composite suppiy at to urhich
any other supply forming part of that composite supply is ancil ry;

(102) "services" means anything other th qn crood s trl ey and

securities but includes activities relating to the use of mo ey or its
conversiou by cash or bY atrl cltht'r' lllor lt'. ft-c.rn'r ortc foi'il
, ri e ncY 01-
 denomination, to another form, currency or denomination wLrich a
separate consideration is charged

B. on going through the submissio's made by the appiicant w find that

applicant has a srreetshop in the ground floor and a restaur t ii-r the
first floor of the same'building. we observe that if we look at t e market
strategy today, we r4iill' notice very often, two or rri.ore srora
combination of goods and services, are supplied together. This could be
due to either of the following reasons: l

(i) A sales strategy - to attract more customers

(i i) The nature or type of goods or services, which requires em to be
bundled or supplied together

Under Service Tax, this mechanism is called Bundle-d service which is

the rendering of a service or seivices with another element of ervice of
services. The service tax law was dealing with pure services an not with
goods per se. Now the concept.introduced is for goods also and is linked
with the concept of Principal Supply. under GST law, supplies hich are
bundled with two or more supplies of goods or services or comb ation of
goods and service s are classified, u,iIh disLinct characteristics. a

(i) Composite Supply

Iiu Mixed Supply

If we look at the definitions (supra), composite suppry is one ere two

or more goods or services or both are supplied together, in natural
bundle and in a normal course of business, provided one of w ich is a
principal supply. However, principal supply u,ill be that supply hich is
predomir-rant over other supplies. This means that the goocls and servlce s
arc' blrndli:cl ou'ins to narnral necessities. The cornposite sr-rpplt, is ta.red
 I

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I

at the rate applicable to the principal supply whereas a tUixld supply

means two or more individual supplies of goods or se.rrice!, or any
t""
combination thereof, made in conjunction with each other by 'l I taxable
person for a single price where such suppiy does not conlstitute a
composite supply. It means cach of these items can be lsupplied
I

tll
separateiy and is not dependent on any other. In Mixed SuirRiV, the
I

combination of goods,.andlor services is not bundled due td natural

necessities, and they can be.supplied individually in the ordinafV course
I

of business.

In order to identify if the particular supply js a Mixed Supply,l

I

^--'l the first

rra^Lioiro
vyqrurLv is to rule out that
a-L the supply ID
Lrrt_ Dt.t}JprJ is a composite supply. [ .rrppty
I

can be a mixed supply only if it is not a composite supply. As alcorollary

' t-
it can be said lhat if tfr. transaction consists of sripplies not
fraturallV
bundled in the ordinary course of business then it wouid b.lu Mixed

l,-,ppfy i.
Supply. Once Lhe amenability of thc transaction as a composit.
ruled out, it u,ould be a mixed supply, classified in terms of a
{uppiy ot
goods or services attracting highest rate of tax.
I

C. From the discussion supra and submission made by the app[icant *e

'find thatin the case of sweet shop cum restaurant, the serviceslfrom the
restaurant is a principle supply which provides a bundled
lupply of
preparation & sale of food ana serving the same and thlrefore it
constitutes a composite supply. It further satisfied the fiotlowing
conditions of a composite supply: I

(i) Supply of two or more goods or services or both together

I

(ii) Goods or services or both are usually provided togethlr

I

in the
normal course of business, I

6l
I

I
 ln the instant case the nature of restaurant services is such t at lt may
be treated as the main supply and the other suppiies mbined
rn,ith such main supply are in the nature of incidental or anciilary
services. Thus restaurant services get the character of pr orninant
supply over other supplies. Therefore in the present case the su piy shall
be treated as suppiy bf service and the sweet shop shall be eated as
extension of the restaurant in as much as the said activitlr cove under
Schedule II of the Act ibid and the relevant portion of the san read as
under:

ISee sectiot't 7]

ACTIVITIES TO BE TREATED AS SUPPLY OF GOODS OR PPLY OF

SERVICES, t

6. Composite supply

1'he fotlowing composite supplies sLtall be treated as a supply o- serutces,

namelg:-
/nl
Ivl ---------

(b) supplg, by way of .or as parl of any seruice or in any ot r nlatTner

whatsoeuer, of goods, being food or anA other atticle f, human
consurnption or anA drink (other than alcolrclic liquor fo humant
cottsumption), uthere such supply or seruice ls fnr nn, deferred
payment or other ualuable consideration.

5.2 Now we come to issue o{ applicability of GST rate. Since we al ady held
above that the activity of the applicant come under the ,u-i.* of
"restaurant services", the same falls under Heading 9963 of ST rates
on services under Notification No. IL12017- Central Rate ) dated
28.06.2017 ( as amended time to time) and the relevant por or-r o1 the

same is reproduce as under:

 Sl .No, Chapter, Section, Description of service Rate (in %) nditiorr

Heading 9963 (i) Sr-rppl-r', b.r, ri,av ol or as Pro ided that

(Accornmodation, part of an-\, service or in an5 it of inpurt
food and other manner whatsoever, of tax
beverage : goods, being food or any on
services) other article for human ices used in
consumption or drink, lying the
u,here such supply or ice has not
senzice is for cash, deferred
payment or other valuabie
consideration, provided by a
restaurant, eating joint
including mess, canteen,
whether for consurnption on
or away Jrom the premises
where such food or an.y
other article for human
gonsumption or drink is
supplied, other than those
located ih the premises of
hotels, inns, guest houses,
clubs, campsites or other
commercial places meant for
residentiai or lodging
purposes having declared
tariff of any _ unit of
accommodation of seven
thousand five hundred
rupees and above per unit
per day or equivalent.
Explanation. -"declared
tariff includes charges for
all amenities provided in the
unit cif accommodation
(given on rent for sta.v) Iike
furniture, air conditioner,
refrigerators or any other
amenities, but lvithout
excluding an)/ discount
offered on the published
charges for such unit

Thus the rate of GST on aforesaid activity shall be 5% as on ate. As

regard to the issue of admissibility of ITC credit, we find at the
applicant cannot avaii credit on the GST paid on the goods and rvices
used ri-r their said actirrity in tenls of albresaid nolillcaLiorr.
 6. In view of the above, we order as under:

ORDER
(i)
lhe supply 'shall be treated as supply or service and sw et shop
shall be treated as extension of restaurant;
(ii) The rate of GST on aforesaid activity wil be svo as
on dat , on the
condition that credit of input tax .t'rurg"a on goods
and servlces
used in supplying the said service has not been i.k.r,;

(ii i) All the items including takeaway items from the said InlSCS
shall attract GST of 5%o as on date surbject to the conditio
of non
availment of credit of input tax charged on goods and
servi s used
in supplying the said service.

lr' h
ffiu
VIPIN CHAITDRA (MEMBERI

AUTHORITY FOR ADVANCE RULING

GOODS & SERVICE TAX, UTTRAKHAND
oFFICE OF THE COMMISSIONER, SGST, UTTRA
ANWALA. DET
No, 00 J pol,
F
"tq f n"L'ry lUnN/
S+Sg Dat
' 22- IA-201&
''cJv-ana
copy to:

I. The Chief Commissioner, CGST, Meerut Zone, Meerut.

2. The commissioner, cGST, commissionerate Dehradun.
The commissioner; SGST, commissionerate uttarakha'd.
\;.a
5.
Concerned Officer State Tax Dehradun.
Assistant Commissioner, Range-lll, SGST, Ramnagar.
6. Assistant Commissioner, CGST, Division Kashipur.
7. Guard F ile.