Service tax department issued a circular no. 173/2013 dated 7 October 2013 about clarification on service tax on restaurant services. Full circular is as under.
Subject: Restaurant Service- clarification -regarding
As part of the Budget exercise 2013, the exemption for services provided by specified restaurants extended vide serial number 19 of Notification 25/2012-ST was modified vide para 1 (iii) of Notification 3/2013-ST.
This has become operational on the 1st of April, 2013.
2. In this context, representations have been received. On the doubts and questions raised therein clarifications are as follows:
1
|
In a complex where air
conditioned as well as non-air conditioned restaurants are operational but
food is sourced from the common kitchen, will service tax arise in the
non-air conditioned restaurant?
|
Services provided in
relation to serving of food or beverages by a restaurant, eating joint or
mess, having the facility of air conditioning or central air heating in any
part of the establishment, at any time during the year (hereinafter referred
as ‘specified restaurant’) attracts service tax. In a complex, if there is
more than one restaurant, which are clearly demarcated and separately named
but food is sourced from a common kitchen, only the service provided in the
specified restaurant is liable to service tax and service provided in a non
air-conditioned or non centrally air- heated restaurant will not be liable to
service tax. In such cases, service provided in the non air-conditioned /
non-centrally air-heated restaurant will be treated as exempted service and
credit entitlement will be as per the Cenvat Credit Rules.
|
2
|
In a hotel, if
services are provided by a specified restaurant in other areas e.g. swimming
pool or an open area attached to the restaurant, will service tax arise?
|
Yes. Services provided
by specified restaurant in other areas of the hotel are liable to service
tax.
|
3
|
Whether service tax is leviable on goods
sold on MRP basis across the counter as part of the Bill/invoice.
|
If goods are sold on MRP basis (fixed under
the Legal Metrology Act) they have to be excluded from total amount for the
determination of value of service portion.
|
0 Comments