The Orissa Appellate Authority of Advance Ruling (AAAR), while ruling on the appeal by the Goutam Kumar Biswas (Appellant), Asst. Commissioner, CGST against the ruling of the AAR ruled that the bakery selling eatables on take away basis can’t be treated as restaurant services.
The applicant, M/s.Pioneer Bakers has submitted that the bakery products are manufactured either in the premises of the outlets itself and served to the customers or in its workshop which is located nearby to the premises of the outlet of the applicant. Generally the raw materials such as raw chocolates, cookies, etc. are manufactured in the workshops as these goods require heavy machinery and are labour intensive in nature and due to these features the same are prepared in the nearby workshop and brought to the outlets for further customization. No items are sold directly from the workshop and each and every item is brought to the outlet for sale. The outlets are equipped with all the facilities to dine such as table and chairs, air conditioner, drinking water, stylish lights for providing a nice ambience which provide an overall good experience to the customers. The customers are provided with the option of either enjoying their food in the outlets itself by utilizing the facilities present in the outlets or they are at the liberty to take away their food.
The Authority for Advance Ruling, Odisha after thoroughly examining the submission made by the applicant ruled that the supply of Cakes, bakery items, ice creams, chocolates, drinks and other eatable products prepared at the premises of the applicant and supplied to the customers from the counter with the facility to consume the same in the air-conditioned premises itself covered under the restaurant services.
The Asst. Commissioner contended that the applicant is running a bakery business, where different items likes cakes, bakery items, ice creams, chocolates, drinks & other eatable products are sold on take away basis. The facilities provided by the applicant in their outlets cannot be treated as restaurant service.
The coram of members Sushil Kumar Luhani and R Manga Babu noted that “Restaurant service” means supply, by way of or as part of any service, of goods, being food or any other article for human consumption or any drink, provided by a restaurant, eating joint including mess, canteen, whether for consumption on or away from the premises where such food or any other article for human consumption or drink is supplied.
The AAAR further observed that “Specified premises” means premises providing “hotel accommodation” services having declared tariff of any unit of accommodation above seven thousand five hundred rupees per unit per day or equivalent.”
Therefore, the AAAR while setting aside the ruling of the lower authority ruled that the establishments/outlets/premises of the applicant cannot be treated as a restaurant. Consequently, the activities carried out by the applicant from their premises/outlets cannot be considered as restaurant Service.
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