GST on Takeaway Food: Chhattisgarh Advance Ruling STC/AAR/01/2026
The Authority for Advance Ruling classified takeaway food sales as restaurant service, subject to 5% GST without input tax credit.
- Ruling
- NO/STC/AAR/01/2026 dated 25/06/2026
- Dated
- 25 Jun 2026
- Authority
- Authority for Advance Ruling
This page was written by Patron Accounting’s AI from the official release and reviewed before publishing. It explains the document in plain language. It is not the document itself. Where this page and the original differ, the original governs.
The short version
- Takeaway food sales are classified as restaurant service, not supply of goods.
- The applicable GST rate for these food items is 5%.
- Businesses providing these services cannot claim input tax credit.
In short
The company asked if selling food like samosas and sweets for takeaway counts as a simple sale of goods or a restaurant service. The Authority for Advance Ruling (AAR) decided that even without seating, these sales are restaurant services under Goods and Services Tax (GST) rules.
What has changed
How it worked before
Many business owners assumed that selling food for takeaway without providing seating or table service was a simple sale of goods, which would allow them to claim input tax credit on their raw materials.
What has changed
The authority ruled that cooking and supplying food is a composite service. This means businesses must charge 5% GST but are strictly prohibited from claiming input tax credit on the ingredients or services they purchase.
Who this affects
Sweet shops, snack bars, and takeaway food outlets operating in Chhattisgarh.
An example
A local snack shop owner in Raipur sells samosas and sweets exclusively for takeaway. They previously claimed input tax credit on the flour and oil they bought. Based on this ruling, they should now recognize their activity as a restaurant service, stop claiming input tax credit, and ensure they are charging the correct 5% GST rate.
What you should do
This ruling only applies to the specific business that asked the question. If you run a similar shop, you should consult your tax advisor to see if this interpretation applies to your specific business model, as it is not automatically binding law for you.
If you do nothing
If you assume this ruling applies to you and stop claiming input tax credit, or conversely, if you continue claiming it when you should not, you risk a tax audit. A tax officer may demand the repayment of wrongly claimed credits along with interest and penalties. Relying on a ruling that does not apply to your specific case can lead to significant financial liability.
The terms explained
- Composite supply
- A package of two or more goods or services that are naturally bundled together and supplied in conjunction with each other in the ordinary course of business.
- Input tax credit
- The tax a business pays on its purchases that it can use to reduce the tax it owes on its own sales.
- Advance ruling
- A written decision provided by tax authorities to a business to clarify how tax laws apply to a specific transaction.
The ruling in detail
Authority for Advance Ruling
M/S KANHAIYA BIKANER SWEETS
NO/STC/AAR/01/2026 dated 25/06/2026 · Chhattisgarh
Questions before the authority
- whether the supply of pure food items such as samosa, kachori, mixture, sweets and other edible items from shop primarily on takeaway basis is a transaction of supply of goods or a supply of service
- what is the nature and rate of tax applicable to the following items supplied from shop and whether the applicant is entitled to claim benefit of input tax credit with respect to the same: (i) Takeaway order of samosa, kachori, mixture, sweets other edible items when such products are not consumed within the premises of the applicant but are takeaway.
Facts
The applicant is engaged in the business of supplying food items like samosa, kachori, and sweets from their shop. They operate on a takeaway and on-call basis, claiming they do not maintain seating arrangements or service staff for patrons. The applicant contends that their activity constitutes a supply of goods rather than a supply of service.
Ruling
| Question | What the authority ruled |
|---|---|
| Classification of supply | Composite supply of service Classified as restaurant service |
| Nature and rate of tax | 5% GST (2.5% CGST + 2.5% SGST) Without benefit of input tax credit |
| Eligibility for Input Tax Credit | Not entitled Conditioned on the 5% tax rate |
The Authority ruled that the supply of food items by the applicant constitutes a composite supply of service, specifically classified as restaurant service. Consequently, the applicant is liable to pay GST at the rate of 5% and is not entitled to claim input tax credit on the goods and services used in their activity.
Reasoning
The Authority determined that the applicant's activities fall under the definition of restaurant service as per Notification No. 11/2017-Central Tax (Rate). It relied on Schedule II, Entry 6(b) of the CGST Act, 2017, which treats the supply of food by way of or as part of any service as a supply of service. The Authority further cited CBIC Circular No. 164/20/2021-GST, clarifying that services provided by way of cooking and supply of food, even if exclusively for takeaway or door delivery, are covered under restaurant service. Therefore, the applicant is ineligible for input tax credit as they are providing a composite supply of service.
Provisions relied on
- Section 97(2) of the CGST Act, 2017
- Section 103 of the CGST Act, 2017
- Schedule II, Entry 6(b) of the CGST Act, 2017
- Notification No. 11/2017-Central Tax (Rate)
- CBIC Circular No. 164/20/2021-GST
For the practitioner
This ruling confirms that **takeaway food sales** by establishments providing similar services are classified as **restaurant service** and taxed at 5% without input tax credit. It settles the debate for similar business models in Chhattisgarh, reinforcing that the nature of the supply is a composite service rather than a pure sale of goods. Practitioners should note that this decision aligns with the **CBIC circulars** regarding cloud kitchens and takeaway services.
Source
This is a summary prepared from the published order, which is a scanned document. It is a reading aid and not the authority: where the two differ, the order governs. Verify every provision against the original before relying on it.
Original order: https://www.gstcouncil.gov.in/sites/default/files/AAR/chattisgarh_jun_2026_1_4-17.pdf
Legibility of the scan, as read: high.
Prepared 11-10-2026.
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