Case Of: Summit Hotels & Resorts Pvt Ltd
Issued By: West Bengal AAR
Order No: WBAAR 10 of 2025-26
Date: 10th Dec 2025
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GST Rate on Aerated Beverages in Restaurants Treated as Composite Supply Taxed at 18% Whether Standalone or With Food
The applicant, a hotel operating a restaurant within a specified premises, supplies aerated beverages either along with food or independently to dine-in
and room service customers, without any over-the-counter or takeaway sales.
Historically, aerated beverages were treated as an independent supply of goods and taxed at 28% plus compensation cess, even when billed on the same
invoice as restaurant services taxed at 18%.
Customers disputed this treatment and contended that aerated beverages supplied in a restaurant form part of the dining experience and should attract
the restaurant service rate.
The applicant approached AAR seeking clarity on GST rate where aerated beverages are supplied (a) alone, and (b) along with food, both within the
restaurant environment.
AAR observed that supply of aerated beverages in the restaurant involves significant service elements such as preparation, customisation, glassware,
waiter service, ambience, and on-premises consumption.
Such supplies were held to be naturally bundled with restaurant services and squarely covered under Section 2(30) read with Clause 6(b) of Schedule II,
treating them as composite supply of services.
The principal supply in both scenarios – whether beverages are ordered alone or with food – was held to be restaurant service classifiable under SAC 996331.
AAR ruled that aerated beverages supplied in the stated factual matrix are taxable at 18% (9% CGST + 9% SGST) as restaurant service under Notification
No. 11/2017-CT (Rate), applicable to specified premises.