The Central Board of Direct Taxes and Customs on 6th October 2021 has issued a clarification in respect of applicable GST rates on Services by cloud kitchens/central kitchens, Supply of ice cream by ice cream parlors, Satellite launch services provided by NSIL, Services by way of grant of mineral exploration and mining rights attracted GST, etc.
It is clarified that service provided by way of cooking and supply of food, by cloud kitchens/central kitchens are covered under „restaurant service‟, as defined in notification No. 11/2017- Central Tax (Rate) and attract 5% GST and the term restaurant service‟ includes services provided by Restaurants, Cafes and similar eating facilities including takeaway services, room services and door delivery of food.
Therefore, it is clear that takeaway services and door delivery services for the consumption of food are also considered as restaurant service and, accordingly, service by an entity, by way of cooking and supply of food, even if it is exclusively by way of takeaway or door delivery or through or from any restaurant would be covered by restaurant service.
The Board has clarified that where ice cream parlors sell already manufactured ice- cream and do not cook/prepare ice cream for consumption like a restaurant, it is supply of ice cream as goods and not as a service, even if the supply has certain ingredients of service. Accordingly, it is clarified that ice cream sold by a parlor or any similar outlet would attract GST at the rate of 18%
Further the Representations have been received seeking clarification regarding applicability of GST on free coaching services provided by coaching institutions and NGOs under the central scheme of “Scholarships for students with Disabilities” where entire expenditure is provided by the Government to coaching institutions by way of grant in aid.
Accordingly, as recommended by the GST Council, it is clarified that services provided by any institutions/ NGOs under the central scheme of „Scholarships for students with Disabilities” where total expenditure is borne by the Government is covered under entry 72 of notification No. 12/2017-Central Tax (Rate) dated 28th June, 2017 and hence exempt from GST.
Further, the expression “food and food products” in terms of Sl. No. 26 [Item 1(i)f] of notification No. 11/2017-Central Tax (R) dated 28-6-2017 excludes alcoholic beverages for human consumption. As such, in common parlance also alcoholic liquor is not considered food. Accordingly, services by way of job work in relation to the manufacture of alcoholic liquor for human consumption are not eligible for the GST rate of 5% prescribed under the said entry. GST Council recommended that such job work would attract GST at the rate of 18%.
