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Buying ice cream from parlor becomes expensive, will attract 18% GST

Those who evade GST are not well, the government will identify the source of tax evasion

Goods and Services Tax

Buying ice cream from an ice cream parlor or outlet will make food costlier. The Central Board of Indirect Taxes and Customs (CBIC) said that ice cream sold by parlors or such outlets will attract 18 per cent GST. In this regard, CBIC has issued some sets of circulars. It clarified the issues raised by trade and industry on the change in rates related to 21 goods and services, the decision of which was taken in the 45th GST Council meeting on 17 September.

The Finance Ministry said that ice cream parlors selling pre-made ice cream are not like restaurants. They do not engage in any form of cooking at any stage, whereas the restaurant is involved in the work of cooking while providing service.

18% GST will be charged

CBIC clarified that ice cream parlors sell already manufactured ice cream and do not cook/prepare ice cream for consumption like a restaurant. Ice cream is supplied as a commodity and not a service, even though some of the ingredients in the supply are served.

It is clarified that ice cream sold by a parlor or any similar outlet will attract GST at the rate of 18 per cent. Food sold in restaurants is taxed at 5% without input tax credit.

Abhishek Jain, tax partner at EY, said the circular provides clarity on GST for ice cream parlors, but it may raise doubts for other food supplies that sell pre-manufactured food items only with a certain ingredient. Huh.

The ministry also said that as per the recommendation of the GST Council, service provided by cloud kitchen/central kitchen by way of cooking and supply of food comes under ‘restaurant service’ and will attract 5 per cent GST without ITC.
The ministry said, it is clear that takeaway services and door delivery services for consumption of food are treated as restaurant services.

The ministry also clarified that satellite launch services supplied by Antrix Corp. Ltd. to customers outside India will be subject to export of service and zero GST. Satellite launch services will be taxable if the service recipient is located in India.

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Shehnaz is a Corporate Communications Expert by profession and writer by Passion. She has experience of many years in the same. Her educational background in Mass communication has given her a broad base from which to approach many topics. She enjoys writing about Public relations, Corporate communications, travel, entrepreneurship, insurance, and finance among others.

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Shehnaz Ali
Shehnaz is a Corporate Communications Expert by profession and writer by Passion. She has experience of many years in the same. Her educational background in Mass communication has given her a broad base from which to approach many topics. She enjoys writing about Public relations, Corporate communications, travel, entrepreneurship, insurance, and finance among others.

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