GST appellate body clears air on tax credit for sweet shop vs restaurant

Sweet shop not to be regarded as extension of dine-out eatery, and will enjoy tax credit benefit, if its accounts are maintained separately

An owner of a restaurant and sweet shop who runs both set-ups from the same premises will be eligible for input tax credit (ITC) for his sweet shop under the GST regime, as long as the accounts of the two businesses are maintained separately, at least in Uttarakand. 

The appellate authority for advance ruling (AAAR) of the state set aside AAR ruling in this matter. 

Explaining the case, Harpreet Singh, Partner, Indirect tax, KPMG, said AAR had ruled that the sweet shop will be regarded as extension of restaurant. As such, GST at the rate of five per cent would be imposed