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GST Council clarifies F&B supply in cinemas taxable as restaurant service
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Thursday, 13 July, 2023, 08 : 00 AM [IST]
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Ashwani Maindola, New Delhi
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The Goods and Services Tax Council sat for its annual meet here and made clarification about the service tax inside cinema halls on food and beverages supply.
The GST Council clarified that the supply of food and beverages in cinema halls is taxable as restaurant service as long as (a) they are supplied by way of or as part of a service and (b) supplied independently of the cinema exhibition service. Where the sale of cinema ticket and supply of food and beverages are clubbed together, and such bundled supply satisfies the test of composite supply, the entire supply will attract GST at the rate applicable to service of exhibition of cinema, the principal supply.
The Council also decided to bring down rates from 18 per cent to 5 per cent on four items including uncooked, unfried & extruded snack pellets, and fish soluble paste.
According to the Council, “It has been decided to reduce the rate on uncooked/unfried snack pellets, by whatever name called, to 5% and to regularise payment of GST on uncooked /unfried snack pellets during the past period on ‘as is basis’.”
Also, the Council decided to exempt IGST (Integrated GST) on medicines and Food for Special Medical Purposes (FSMP) used in the treatment of rare diseases enlisted under the National Policy for Rare Diseases, 2021, when imported for personal use subject to existing conditions.
Similarly, IGST exemption was also extended to FSMP when imported by Centres of Excellence for Rare Diseases or any person or institution on recommendation of any of the listed Centres of Excellence.
The GST rate on fish soluble paste was also reduced from 18% to 5% along with regularising the matters relating to desiccated coconut for the period 1.7.2017 to 27.7.2017 on “as is basis” in view of genuine interpretational issues.
Further, the Council decided that on pan masala, tobacco products and so on, where it is not legally required to declare the retail sale price, the earlier ad valorem (according to value) rate as was applicable on 31st March 2023 may be notified in order for levy of Compensation Cess.
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