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GST on Restaurant Services

11 September 2018

A Partnership firm having a commercial building providing renting service but the said partnership firm desire to run a restaurant on ground floor of such premise.
Will the said partnership firm have to take seperate GST registration under composition scheme for running such restaurant if said firm wants chagre 5% GST rate or such restaurant service can be merged( @ 5% without claiming ITC) with current renting business in which the said firm charge 18% GST for renting service

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EXTENSION OF DUE DATE SUMMARY 1) Notification No.43/2018 ■ Extension for Quarterly GSTR-1 (T/o <= 1.50 cr) July 17 to Sept 18 :- 31st Oct 2018 Oct 18 to Dec 18 :- 31st Jan 2019 Jan 19 to Mar 19 :- 30th Apr 2019 ■ Time limit for GSTR-2 and GSTR-3 for the period July 2017 to March 2019 shall be subsequently notified in the Official Gazette. 2) Notification No.44/2018 ■Extension for Monthly GSTR-1 (T/o > 1.50 cr) July 17 to Sept 18 :- 31st Oct 2018 Oct 18 to Mar 18 :- 11th day of the succeeding month 3 & 4) Notification No.45/2018 & 46/2018 ■Extension for GSTR-3B for newly migrated person (migrated after 06.08.2018) July 17 to November 18 :- 31st Dec 2018.

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Rohit Tibrewal (Student & Senior Accountant) (3193 Points)
Replied 11 September 2018

With same PAN you can't be able to take registration both under Regular and Composition.

So better to run in same GSTIN.

And even though as per new notification you are able to raise bills @ 5%.

1 Like

Shivam RC (Student) (23683 Points)
Replied 11 September 2018

Agree with Rohit Sir's explanation...

As per the proviso of SECTION 10 of CGST Act 2017, where more than one registered persons are having the same Permanent Account Number [issued under the Income-tax Act, 1961], the registered person shall not be eligible to opt for the scheme under sub-section [1] unless all such registered persons opt to pay tax under that sub-section.

So you can't apply for Composition Scheme for Restaurant business since you are already registered under Regular Scheme for your Renting business.

Therefore, it would be advisable to use the same GSTIN for both your Renting business and Restaurant Service.

And Restaurant are now taxed at 5% GST rate without the benefit of ITC.

2 Like

Rohit Tibrewal (Student & Senior Accountant) (3193 Points)
Replied 11 September 2018

Thank you @ Shivam R C

gaurav bhootra (CA) (52 Points)
Replied 11 September 2018

Sir
I think if restaurant business is with hotel business then only we can use 5% rate for restaurant service other (subject to room tariff) otherwise we have to take seperate registration for such business.
Now my question is that can we merge restaurant business with renting business instead of hotel business or whether it would be possible that we should take seperate GST registration in regular scheme and then use 5%rate .

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Rohit Tibrewal (Student & Senior Accountant) (3193 Points)
Replied 11 September 2018

As per new notification for all 5% except room service >7500

gaurav bhootra (CA) (52 Points)
Replied 11 September 2018

Please share notification no

Rohit Tibrewal (Student & Senior Accountant) (3193 Points)
Replied 11 September 2018

https://www.indiafilings.com/learn/gst-rate-restaurants/

gaurav bhootra (CA) (52 Points)
Replied 11 September 2018

will your answer remain the same if we provide services by way of renting of residential dwelling for use as a residence instead of proving services by renting of immovable property in first floor and restaurant service in ground floor?