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December 2019

A bakery where food items are not prepared and served cannot be considered as a restaurant. The tables in the premise are a mere facility provided to consume the food sold

By PULOMA DALAL, JAYESH GOGRI, MANDAR TELANG, Chartered Accountants
Reading Time 2 mins
19. [2019-TIOL-440-AAR-GST] M/s Square One Homemade Treats Date of order: 30th September, 2019

A bakery where food items are not prepared and served cannot be considered as a restaurant. The tables in the premise are a mere facility provided to consume the food sold

FACTS

The applicant company is engaged in sale of food products such as baked items like cakes, cookies, brownies, ready-to-eat homemade packed food, ready-to-eat snacks and hot and cold beverages through dispensing machines. All food items sold are pre-packed and no cooking is done at the premises. There is a table for customers who eat food procured from the counter in the premises. The ruling is sought to know whether resale of food and bakery products falls under restaurant services. Further, whether HSN and tax rates favoured by the applicant would be correct.

RULING

The Authority held that a restaurant is a place of business where food is prepared in the premises and served based on orders received from the customer. Whereas in the present case it is a bakery where food items are sold and the tables in the premise are a mere facility provided to consume the food items in the shop. Accordingly, it was held that the bakery cannot be considered as a restaurant.

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