The Kerala Authority of Advance Rulings in an application filed by M/s Square One Homemade Treats while prescribing the rates applicable on different items on bakery products held that resale of food and bakery products are not restaurant services.
The applicant is engaged in the business of reselling pre-packed food products like cakes, baked items like cookies, brownies, ready to eat homemade packed food, ready to eat snacks, hot and cold beverages through dispensing machine. In the bakery premises, they have provided a table for customers who like to eat food items procured from the counter.
An advance ruling is sought on (1) whether resale of food and bakery products fall under restaurant services and (2) whether the classification of HSN and Tax rates are done by the applicant is correct or not.
The Bench of Authority constituting of members B.G. Krishnan and B.S. Thagarajababu held the following:
With respect to the first issue, it was held that resale of food and bakery products does not fall under restaurant services. The Authority differentiate between the services provided by a restaurant and a bakery wherein, in the latter, ready to eat items are sold.
With respect to the second issue, the Authority classifies different products under different Schedules. It provides for the classification of Sweets, Chappathi, Coconut Chutney Powder, etc. specifically by providing the rate applicable on each of the specified item.
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