NEW DELHI: Services provided by cloud kitchen are covered under restaurant services and will attract GST of 5% without any input tax credit, Central Board of Indirect Tax said in a clarification note issued on Wednesday.
“It has been clarified that service provided by way of cooking and supply of food, by cloud kitchens/central kitchens are covered under “restaurant service”, and hence will attract 5% GST (without ITC),” the CBIC note said.
The board has also clarified that where ice cream parlours sell already manufactured ice- cream, it is the supply of ice cream as goods and not as a service, even if the supply has certain ingredients of service.
So accordingly, ice cream sold by a parlour or any similar outlet would attract GST at the rate of 18%.
Earlier the advance ruling authorities in some cases have concluded that the ice cream sold in ice cream parlour would be covered under restaurant services, except when sold in bulk orders) and therefore attract 5% GST (without ITC).
“While the circular provides necessary clarity on GST treatment for ice cream parlours, it might open area of doubts for other such food suppliers who sell already manufactured food item with only a certain ingredient of service,” Abhishek Jain, Tax Partner, EY, says.
The Board had received representations seeking clarification in respect of GST rates on the various activities including admission to amusement parks and services supplied by contract manufacture to brand owners or others for the manufacturing of alcoholic liquor for human consumption, among others.
The board cilarified that 28% rate will be applicable on admission to a place having a casino or race club, or admission to a sporting event like IPL. Rest all places will attract rate of 18%.
CBIC added that alcohol is not food, so services by way of job work related to the manufacturing of alcoholic liquor for human consumption are not eligible for the GST rate of 5% prescribed under the said entry. GST Council suggested 18% GST on such job work.