New Delhi. Now buying ice cream from the parlor will become expensive. In fact, the Central Board of Indirect Taxes and Customs ie CBIC said on Wednesday that ice cream sold by parlors or such shops will attract 18 percent GST. In two sets of circulars, the CBIC clarified its stand on the issues raised by trade and industry on changes in rates relating to 21 goods and services, which were decided in the 45th GST Council meeting on September 17.
With regard to ice cream parlors, CBIC said that such places sell pre-manufactured ice creams and are not like restaurants."Ice cream parlors do not engage in any form of cooking at any stage while restaurants are involved in the cooking/preparation work in the course of rendering the service," the circular said.
CBIC clarified that their activity involves the supply of ice cream as a good (a manufactured article) and not as a service, even if some elements of the service are present.GST will be levied on it at the rate of 18 percent.
EY Tax Partner Abhishek Jain said that in the first few cases the authorities had said that ice cream sold in ice cream parlors would be covered under restaurant services (except those sold in bulk orders) and hence a GST rate of 5 percent would be levied.
The circular now provides that since ice cream parlors already sell manufactured ice cream, the restaurant clause does not apply to them.