Case Details: In re: Indian Wire Products Company (2026) 42 Centax 134 (A.A.R.-GST-W.B.)
Judiciary and Counsel Details
- S/Shri Jaydip Kumar Chakrabarti & Shafeeq S., Member
- Shri Rajarshi Dasgupta, A/R for the Applicant.
Facts of the Case
The applicant–restaurant proposed to offer food and drinks along with herbal or tobacco-based hookah within its premises as part of the dining experience. The hookah apparatus was to remain the property of the restaurant. The applicant contended that the supply of hookah in conjunction with food constituted a composite restaurant service. Therefore, it should be taxed at the lower rate applicable to restaurant service under Clause 6(b) of Schedule II. The department, on the other hand, argued that hookah is a tobacco product classifiable under Heading 2403. Consequently, it is subject to a higher tax rate, separate from the restaurant service tax. The matter was subsequently placed before the Authority for Advance Ruling (AAR).
AAR Held
The AAR held that the supply of food and hookah are distinct supplies and cannot be treated as a composite restaurant service under Clause 6(b) of Schedule II. This is because hookah smoke is not considered ‘food or any other article for human consumption’ and is not consumed in the same manner as food or drink. It was further held that the supply of hookah is a separate service, with the principal supply being of goods. Additionally, it is not dependent on the restaurant service. Therefore, tobacco-based hookah is taxable separately at a higher rate under Heading 2403.
List of Cases Cited
- Sanjay Anjay Stores v. Union of India — 2017 SCC Online Cal 16323 — Referred [Paras 2.7, 4.5]
- Sri R. Bharath v. State of Karnataka — W.P. No. 4461 of 2024 (GM-RES), dated 22-4-2024 — Referred [Para 2.6]
- Summit Hotels & Resorts (P.) Ltd. — (2026) 38 Centax 153 (A.A.R. – GST – W.B.) — Referred [Paras 2.6, 4.5]
List of Departmental Clarification Cited
- Circular No. 164/20/2021-GST Dated 06.10.2021
