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Confused About GST Rate on Sweet Shops & Restaurant: Clear Your Doubts Now

gst rate sweet shops restaurant

Recently we have heard a lot about local sweet shops turning into restaurants which will further save them GST of up to 13 percent. The news is however very divergent and confusing as there is no solid base to the tax applicability.

According to an Authority of Advance Ruling (AAR), if in case a sweet shop runs a restaurant in the same premise that there will be 5 percent GST applicable on all the items.

This decision is basically not appropriate and would create confusion for all the shop owners. Here we will clear the confusion regarding the GST rate in sweet shops running a restaurant on the same premises.

For restaurants whether air-conditioned or not, GST rate is applicable at 5% without input tax credit facility. Thus a universal GST rate is applicable to the restaurants at 5%.

However, if such services are provided along with hotels, inns or guest houses (tariff above Rs. 7500/-), the tax will remain chargeable at 18%.

These restaurants have an option to opt for composition scheme if the turnover is below 1 crore in an F.Y. thereby reducing the compliances related to GST returns etc. and these restaurants can’t charge tax according to the GST act.

So we have cleared the part of GST applicability on the local sweet shops whether or not a restaurant. SAG Infotech is the leading platform to get all the queries and tax-related questions solved by the professional tax experts. Here we have given our views to expand the understanding of our readers. As a provider of tax solution such as Gen GST and Genius, we are always ready to help our clients and readers alike.

Disclaimer:- "All the information given is from credible and authentic resources and has been published after moderation. Any change in detail or information other than fact must be considered a human error. The blog we write is to provide updated information. You can raise any query on matters related to blog content. Also, note that we don’t provide any type of consultancy so we are sorry for being unable to reply to consultancy queries. Also, we do mention that our replies are solely on a practical basis and we advise you to cross verify with professional authorities for a fact check."

Published by Subodh Kumawat
Subodh has done with numerous professional degrees ranging from Human Rights to Banking along with MBA in HR Marketing. He is also interested in the field of tax-related articles and blog as per the industry based norms. Having expert knowledge in diverse sectors, he assures facts and figures along with testimony, in his articles. Working in SAG Infotech, he is a trusted author among the readers globally. View more posts
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14 thoughts on "Confused About GST Rate on Sweet Shops & Restaurant: Clear Your Doubts Now"

  1. My query-
    BIkaner wala/ Haldi ram both are providing Restaurant services with sale of sweets manufactured inhouse.
    GST on sales – 5% applicable.
    ITC can be available on sweet item ?

  2. If someone has sweets shops Like Bikaner Misthan Bhandar Whether it is considered as Trader/Manufacture OR Restaurant Service Provider for the purpose of applicability of tax rate in composition levy.

  3. I own a restaurant cum sweet shop in TN where I cook for restaurant and buy and sell sweets. Turnover of less than 1cr. Can we go under composition scheme? If so are we losing the ITC paid on buying sweets from the vendor?

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