Question

We have a small shop dealing in readymade namkeen, and other eatable and also manufacturing some food items like samosa, kachori etc. There is no sitting facility for customer.

Q1. What is the applicable rate of tax as a ordinary registered person.
Q2. What is rate of tax if composition scheme is availed.
Q3. Whether are we eligible for composition scheme or not

Answer

In your case you are doing two activities first is trading and second is making of eatables & selling it. The composition scheme is available to the trader and for eatables to the restaurant.

Now the question is whether you are covered under restaurant or not.
Even the eatery having provision of single chair would be covered under restaurant. Now we want to discuss the environment in Indian streets and market. There are several moving trolleys providing food on the trolleys where there is no arrangement of sitting but the customer purchase the food (samosa etc) and eat on the spot. Sometimes eating counters are fixed on the trolley and sometime even without any eating counter but the consumer consume at the same place where the food is sold.

The same decision is given by Uttarakhand Authority of Advance Ruling in case of M/s Kundan Misthan Bhandar enclosed herewith for your reference.

In this case we should understand the intention of law. The intention of law is to provide some privileges to the small eateries. The law should not be read strictly within the words but should be interpreted as per the sanctity of law.
(Reply dt. 05/01/2019)