Judgement: C‑146/22. – YD | Even in the case of hot chocolate, it is not clear whether supply of goods or supply of services is taking place.
In the underlying case, the Polish tax authority classified the serving of hot chocolate prepared in a café for takeaway as a restaurant service subject to a reduced VAT rate of 8%. The entrepreneur operating the café contested this on the ground that orders for takeaway should be classified as supply of goods, sale of a milk-based beverage in this case, which should be subject to a lower 5% VAT rate in Poland.
The European Court of Justice pointed out that, according to the EU Implementing Regulation, the sale of a ready-made beverage is considered a restaurant service when it is accompanied by services enabling immediate consumption, and these services predominate. However, there may be borderline cases where it needs to be examined whether the product can be considered interchangeable (fulfilling the same need) with food and beverages available in retail commerce and sold at food service establishments from the perspective of an average consumer. The court attached significant importance to the quality difference between a milk-based beverage prepared to customer specifications and served at the ideal temperature in a café and a similar pre-made beverage available in a store, even when the customer requests it for takeaway in the café. Therefore, in specific situations, it may be considered a restaurant service if the customer receives their prepared beverage in a takeaway cup in the café, and it does not violate community law even if this results in two different types of similar food products being subject to different reduced VAT rates.