GST rate on Waffle Store/ Bakery

Hi Rajinder,

Here’s a breakdown of your GST questions for a Waffle Store/Bakery selling items like waffles, pancakes, burgers, wraps, sandwiches, and shakes via food delivery platforms like Zomato/Swiggy:

1. GST rates on your food items:

• Waffles, Pancakes, Burgers, Wraps, Sandwiches (ready-to-eat, prepared food):
  Generally 5% GST without ITC (Input Tax Credit) applies to restaurant/food delivery services.
  These fall under the “restaurant services” or “food served in restaurants” category.

• Chocolate-coated pancakes or other sweets:
  Could attract 12% GST as these come under “chocolates” or confectionery items.

• Shakes:
  Typically charged at 18% GST (like other beverages).

So yes, different items attract different GST rates.

2. Can you opt for Composition scheme?

• Composition scheme is available only to small taxpayers with aggregate turnover up to Rs. 1.5 crores (this limit may vary by state).

• However, restaurant services including food delivery via online platforms are excluded from Composition scheme after July 2019.

• So, you cannot opt for composition scheme if you are supplying through Zomato/Swiggy or providing restaurant services.

3. Input Tax Credit (ITC) entitlement if Composition is NOT opted?

• If you are regular taxpayer (not under composition), you can claim ITC on your input purchases (like raw materials, packing, etc.).

• You must maintain proper invoices and comply with GST filing.

• You will need to charge applicable GST rates on each supply as per the product category (5%, 12%, 18% etc.).

• ITC helps you reduce your GST liability.

Summary for you:

If your turnover is ₹5 lakh/month (₹60 lakh/year), you fall under the regular taxpayer category and will have to charge GST at different rates on items accordingly and can claim ITC on inputs.