Question ID : 44713

Doubts regarding payment of GST comensation cess on aerated water by restaurants

My client is doing restaurant service paying GST at 5% without claiming ITC. Is he liable to pay GST compensation cess on supply of aerated water in addition to this 5% GST.

In my view, no compensation cess shall be paid along with 5% GST on the restaurant services. To conclude, sale of aerated water as a 'Supply of goods' attracts GST @28% + 12% compensation cess. However, when the same is served in the restaurants, it is treated as a 'Supply of service ' and in the absence of a notified service on which cess shall be paid, the same will not arise.