Input tax credit—rate of tax—restaurant service—In the instant case, the applicant is in business of running restaurants under the name and style of Cafe Coffee Day, and seeks advance ruling on applicability of N/N. 46/2017 dated 14.11.2017 and the issue that Whether the applicant is entitled to pay GST @ 18% (CGST-9% and SGST-9%) and claim input tax credit?”

Held that— The classification of the services rendered by the applicant is, clearly defined under Service Code (Tariff) 996331. Notification No. 11/2017Central Tax (Rate) dated 28th June 2017 notifies the rate of central tax in column 4 on the intra-State supply of services of description as specified in column (3) of the Table in the notification, falling under Chapter, Section or Heading of scheme of classification of services as specified in column (2) - The restaurant services provided by the applicant are squarely covered under serial number 7 of the aforesaid Notification.
Explanation given in Notification 46/2017 makes it clear that 2.5% tax shall be payable and input tax credit shall not be available. The explanation removes any kind of ambiguity on the issue.

Ruling— The Applicant is not entitled to pay the GST @ 18% with input tax credit as the services being offered by the Applicant are classified under a heading attracting GST @ 5%, without input tax credit. [2018] 3 TAXLOK.COM 058 (AAR-Karnataka)