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.
Supply of ice cream by ice cream parlors:
Representations have been received requesting for clarification regarding the supplies provided in an ice cream outlet.
Ice cream parlors sell already manufactured ice- cream and they do not have a character of a restaurant. Ice-cream parlors do not engage in any form of cooking at any stage, whereas, restaurant service involves the aspect of cooking/preparing during the course of providing service. Thus, supply of ice-cream parlor stands on a different footing than restaurant service. Their activity entails supply of ice cream as goods (a manufactured item) and not as a service, even if certain ingredients of service are present.
Accordingly, as recommended by the Council, it is clarified that where ice cream parlors sell already manufactured ice- cream and do not cook/prepare ice-cream for consumption like a restaurant, it is supply of ice cream as goods and not as a service, even if the supply has certain ingredients of service. Accordingly, it is clarified that ice cream sold by a parlor or any similar outlet would attract GST at the rate of 18%.
The Circular can be accessed at: https://www.cbic.gov.in/resources//htdocs-cbec/gst/Circular%20No.%20164_2021_GST.pdf;jsessionid=78C42EDA20161CCA3B60E7E05C91D6A8