The CBIC vide Circular No. 164/20/2021-GST dated October 06, 2021 has provided clarification regarding GST rates & classification based on the recommendations of the GST Council in its 45th meeting held on September 17, 2021.
Services by cloud kitchens/central kitchens:
Representations have been received requesting for clarification regarding the classification and rate of GST on services rendered by Cloud kitchen or Central Kitchen.
The word ‘restaurant service’ is defined in Notification No. 11/2017 – CTR as below: -‘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 explanatory notes to the classification of service state that „restaurant service‟ includes services provided by Restaurants, Cafes and similar eating facilities including takeaway services, room services and door delivery of food. Therefore, it is clear that takeaway services and door delivery services for consumption of food are also considered as restaurant service and, accordingly, service by an entity, by way of cooking and supply of food, even if it is exclusively by way of takeaway or door delivery or through or from any restaurant would be covered by restaurant service. This would thus cover services provided by cloud kitchens/central kitchens.
Accordingly, as recommended by the Council, it is clarified that service provided by way of cooking and supply of food, by cloud kitchens/central kitchens are covered under ‘restaurant service’, as defined in notification No. 11/2017- Central Tax (Rate) and attract 5% GST [ without ITC].
The Circular can be accessed at: https://www.cbic.gov.in/resources//htdocs-cbec/gst/Circular%20No.%20164_2021_GST.pdf;jsessionid=4C1EBC470F6C28BE4C8004AF998BD45C