swaroop (CA Final) (95 Points)
21 February 2012Recently i went to KFC where i was charged both Service Tax as well as VAT. My bill amount is Rs. 353 on which ST is charged @ 10% (Rs.35)and on Rs.388 VAT is charged @ 14.5%, i.e., Rs. 57/-, all together i paid Rs.445/-. on the Invoice TIN no. is mentioned however Service Tax No. is not mentioned.
Now my doubt is, can a merchant collect both ST & VAT??
jogendra
(DGM-Commercial)
(331 Points)
Replied 22 February 2012
Dear Mr Swaroop Ji,
In the above mentioned case the KFC charged VAT on the value of goods supplied to you like beverage, etc. and service tax is charged on the value of services, i.e. serving food etc. Hence there is two things one is sale of material on which VAT was charged and second was providing of services on the service tax was charged.
Faiz Ahmed
( Article Trainee)
(1731 Points)
Replied 22 February 2012
| Originally posted by : jogendra | ||
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Dear Mr Swaroop Ji, In the above mentioned case the KFC charged VAT on the value of goods supplied to you like beverage, etc. and service tax is charged on the value of services, i.e. serving food etc. Hence there is two things one is sale of material on which VAT was charged and second was providing of services on the service tax was charged. |
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May we know under which Section ST was levied?
CA Ganesh Karthik
(Chartered Accountant)
(368 Points)
Replied 22 February 2012
As per my knowledge, service tax (if applicable) shall be payable under the category of "Restaurant Service). The definition of taxable service for Restaurant service is
"Taxable service, means any service provided or to be provided to any person by a restaurant, by whatever name called, having the facility of air-conditioning in any part of the establishment, at any time during the financial year, which has licence to serve alcoholic beverages, in relation to serving of food or beverage, including alcoholic beverages or both, in it premises."
With effect from 1.5.2011, by way of Notification No. 34/2011 (read with Notification No. 1/2006), only 30% of the gross amount charged shall be liable to service tax in case of restaurant service. This abatement is subject to the conditions prescribed in the notification.
But here, we are not sure as to under what service the service provider is charging Service Tax.
In addition, there is a sale of food which will attract VAT. Here few companies do charge VAT on the same amount as is for the Service tax. However, here, in your case, they have charged VAT amount even on the Service tax portion, which I think is not proper.
Others may please provide their feedback on this..
jogendra
(DGM-Commercial)
(331 Points)
Replied 22 February 2012
it is levied as per Section 65(105)(zzzzv) of Finance Act, 1994..
SANJAY MAHESHWARI ACA ACS
(Chartered Accountant)
(123 Points)
Replied 22 February 2012
Chirayu Kothi
( Consultant Excise and Service Tax)
(248 Points)
Replied 22 February 2012
VAT and Service Tax are muttually exclusive taxes can not charge both on at a time.. various decisions..
swaroop
(CA Final)
(95 Points)
Replied 23 February 2012
thnk u all frens for ur response. i also consulted an expert regarding this issue. wat he sed is wen ders a sale element he can charge VAT and wen thers a service element he can charge ST and wen ders a composite element predominent factor will be considered. and i got satisfied with that answer.
Objections are accepted.
and Mr. Jogendra ji, serving food when u go to a restaurant doesnt comes under new activity. its part of ur sale. wen u go to a jewellery shop even der u will be given lot of services by displaying them to u, allowing u to try dem and many such services. but ultimately he will only charge VAT on that.
Nikhil Sharma
(Student)
(25 Points)
Replied 13 June 2012
Reply Fast its Urgent...!!!
Amount charged by catering services:
Gross amount: 704334.88
Vat @ 13.5% on gross amount: 95085
Service tax @ 10% on 50% of Gross amount: 35217
Edu. Cess Tax @ 3% on amount of service tax: 1057
Net Amount: 835693.34
Is this extra taxation on 50% of gross amount as vat.....ok..??? since on 50% is charged as service tax then why vat is on 100% of the amount...???
Plz....provide me reason ...is this correct..!!!
Harsh dedhia
(Student CA Final )
(59 Points)
Replied 06 January 2014
in all cases where there is vat and service tax is charged together whether Set off can be taken or not of both i.e VAT in vat return and service tax in service tax return???
is any notification regarding the same. if yes, plz mention the same.
CAclubindia
