If you wish to celebrate someone’s birthday, you may have to shell out a bit more for the paraphernalia since balloons, caps, snow sprays or candles given along with birthday cakes are neither complimentary nor free, as per a recent advance ruling that proposes levying of Goods and Services Tax (GST) on these items.
In a recent advance ruling, it was argued that any item provided by restaurants or cake shops along with the cake should be taxed.
Under the GST framework, nothing is for free. The ruling said that GST should be levied on these items and they should not be treated as composite supply.
The Odisha Authority of Advance Rulings (AAR) has, in Pioneer Bakers case held that supply of items such as birthday caps, knives, and decorative items along with the cakes by restaurants is not a composite supply. Accordingly, they would attract GST as per schedule rates and not at 5% as restaurant services.