Sale of packaged food and online food delivery

Hey Anshu! Your queries are common and important in the GST context of food businesses. Here’s a detailed clarification:

1. Sale of Packaged Food & Online Food Delivery through E-commerce Operator:

• Supply of Goods or Services?
  Sale of packaged food is considered a supply of goods under GST.
  When the sale is made through an e-commerce operator, the operator facilitates the supply but is not the supplier of goods itself.

• Online Food Delivery through Own Website:

  • If the restaurant delivers food using its own delivery staff or logistics, then the entire transaction is a composite supply where the principal supply is the food (goods) and transportation is incidental to supply of goods.

  • If transportation (delivery) is significant and separately charged, it can be considered as a composite supply of goods + service (transportation), with food as principal supply.

2. GST Rate for Restaurants under Composition Scheme:

• For restaurants supplying food (including packaged food) under Composition Scheme:

  • Tax rate is 1% (0.5% CGST + 0.5% SGST) on the aggregate turnover in the state.

  • The composition scheme rate of 1% is applicable to all restaurant supplies irrespective of packaged or cooked food sold.

  • There is no separate tax rate for packaged food as trader under composition in case of restaurants.

3. Summary Table:

Additional Notes:

• E-commerce operator is liable to collect TCS @ 1% on the net value of taxable supplies made through it (except composition dealers).

• If transportation is provided separately by a third party, then GST on transportation service is charged separately.