Gst on sale by restaurant to another branch

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This query is : Resolved

ANKUR GUPTA (Querist)

09 February 2019 Dear CA Club Expert Members,
I have query regarding GST on restaurant business,
There is entity which is in restaurant business. Its Head office is located in Delhi. There is central purchases and all the purchases are made in the Delhi Head office. Now the goods purchases are distributed to its registered branches located in another state in two ways

Some of the goods are distributed as it is without any processing and some of the goods are distributed with some processing like converting the stock into gravy form (Liquid form) and then sending the goods to branch
Now I want to know whether GST need to be paid when goods are sent by restaurant to its branch located in another state and it so at what rate.
Here sale is not made to end consumer by to another entity registered under GST.
As per the GST council decision restaurant will charge 5% GST without any ITC So if we charge GST Will the another branch paying GST will get credit for the GST paid on its purchases ?
Also tell Whether the Head office that is selling goods to another branch can it deduct the tax paid on its purchases from the tax collected on selling goods to its registered branch ?

Rajesh Kumar

Rajesh Kumar (Expert)

10 February 2019 You need to understand the different transactions. Sale of food items is not a service; it is supply of goods which shall attract GST on supply of goods falling under Chapter 20 or 21 of the Schedule. Once the food reaches restaurants- there a service is provided which involves sale of food items- and at that point of time it is service which shall attract rate of supply of restaurant service. Examine the issue in details and develop a business process with the help of your GST consultant. The information provided in the question is not enough to given an informed answer.

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