West Bengal AAR rules that aerated beverages served in restaurants are subject to 18% GST as part of composite supply with restaurant services.
In a significant ruling, the West Bengal Authority for Advance Rulings (AAR) has provided clarity to Summit Hotels & Resorts Private Limited regarding the Goods and Services Tax (GST) applicable to the supply of aerated beverages in their restaurant. The ruling confirms that aerated beverages, whether supplied independently or alongside food, are considered a composite supply of service with the principal supply being restaurant service, subject to a GST rate of 18%.
The decision was delivered by a bench comprising Shafeeq S, Joint Commissioner, CGST & CX, and Jaydip Kumar Chakrabarti, Senior Joint Commissioner, SGST, on December 10, 2025.
Summit Hotels & Resorts, which operates a hotel offering a variety of services including dining, had sought clarification on the GST rate applicable to aerated beverages. The hotel was charging a GST rate of 28% plus cess for aerated beverages, separate from the 18% charged on other restaurant services, leading to disputes with customers who argued for a uniform 18% rate.
The AAR's ruling emphasizes that the supply of aerated beverages, whether consumed with food or ordered independently, constitutes a composite supply of service within the restaurant setting. The principal supply being the restaurant service, which is taxable at 18% under serial no. 7(vi) of Notification No. 11/2017 - Central Tax (Rate) dated 28.06.2017.
The judgment underscores the inherent service component involved in the supply of aerated beverages, including preparation, customization, and presentation within the restaurant's premises, setting it apart from retail shop sales. The AAR highlighted that aerated beverages served in the hotel restaurant are not mere goods but part of the restaurant service experience, thus qualifying for the composite supply treatment.
This ruling aligns with previous decisions from authorities in Tamil Nadu and Uttarakhand, reinforcing the position that beverages served in restaurant settings are taxable as part of restaurant services, providing much-needed clarity to businesses in the hospitality sector.
Bottom Line:
GST - Supply of Aerated Beverages in restaurants, whether supplied independently or with food, qualifies as a composite supply of service with restaurant service being the principal supply and taxed accordingly.
Statutory provision(s):
- Central Goods and Services Tax Act, 2017
- West Bengal Goods and Services Tax Act, 2017
- Section 7 of the CGST Act
- Section 2(30) of CGST Act
- Schedule II of the GST Act
- Notification No. 11/2017 - Central Tax (Rate) dated 28.06.2017
Summit Hotels & Resorts Private Limited, (AAR)(West Bengal) : Law Finder Doc Id # 2822182
