GST Rate analysis on Ice-cream parlours supplying manufactured ice creams
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*Takeaway from 45th GST Council meeting*(Ice-cream parlours supplying manufactured ice creams)
Recently in the 45th GST council meeting, it has been recommended that "Ice-cream parlours supplying manufactured ice-creams will be taxed @ 18% GST”. Further, the Circular issued pursuant to the above meeting clarified that where ice cream parlours sell already manufactured ice cream and do not cook/prepare ice-cream for consumption like a restaurant, it is supplied 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 parlour or any similar outlet would attract GST at the rate of 18%.
Question: - whether ice cream parlours can constitute a restaurant so as to provide restaurant services chargeable to GST at the rate of 5% or it is merely a sale of goods.
Fact: - Generally, a restaurant service would warrant services such as arrangements for seating, décor, music and dance, both live and otherwise, hostesses, liveried waiters and the use of fine crockery and cutlery, among others
Question: - if an ice cream parlour has all these facilities, would it still be considered as undertaking the supply of goods (i.e. ice cream) taxable at 18%.
*Ice cream Parlours- Sale of Goods or Rendering Services*
To analyse and ascertain whether ice cream parlours are rendering a restaurant service or supply of goods, one needs to analyse the following two conditions;
• The ice cream parlour is only providing take away service
• Other than the sale of ice-creams, the services like seating (exclusive or common seating like in food courts), customized ice cream, shakes etc are provided
In the present recommendation given in the 45th GST council meeting, this reasoning is straight away neglected, because there has been no distinction between the ice-cream parlours as in the two cases mentioned above. In that sense the ambiguity arises as the parlour providing restaurant services would be taxed at 5% or 18%.
*45वीं जीà¤
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