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Food items sold outside a restaurant setting invite 18 per cent GST, while those served in restaurants are charged 5 per cent GST.
Himesh Foods (‘Mad Over Donuts’), represented by Advocate Abhishek A Rastogi, told the court that the supply of food products like donuts and cakes constitute a composite supply of services, as defined under the CGST Act.
They said that the provision of food at restaurants, eateries, canteens, and messes -- whether consumed on-premises or taken away -- fall under the category of restaurant services, which are taxed at a lower GST rate of 5%.
The Karnataka High Court said that since there was a prior undertaking by the tax authorities before the Bombay High Court, assuring that no coercive action would be taken while the classification issue was under consideration, the same should be applicable here as well.
The court emphasised the importance of judicial consistency and agreed that no precipitative or coercive measures could be pursued by Karnataka’s GST authorities during the pendency of the case.