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Is VAT and Service Tax both applicable?

S. Banerjee (Practising Cost Accountant. Core area- Central Excise. Service Tax Costing system installation including maintenance of Cost Records and Cost Audit and Management Audit mainly Revenue leakages Audit) (622 Points)

21 March 2009

I have observed that one of the most famous 5 star hotel in kolkata charges both service tax and VAT on their total Bill value. Do you have any knowledge on this? is it covered under any notification if so pl inform me.

Thanks in advance,

S. Banerjee

9433050121

banerjee.sambhu @ rediffmail.com

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15 Replies

Ankur Agrawal (CS, CA Final) (239 Points)
Replied 21 March 2009

Originally posted by :S. Banerjee

pls check ur mail...!!

S. Madhanraj (Accounts Manager) (26 Points)
Replied 25 March 2009

Please state whether both VAT and servicetax is charged for the same item. If yes, it is mere looting, this can be taken to repective authorities. Hotels can charge VAT on food items and Service tax on Room rents.

satynarayan tiwar (Professional) (61 Points)
Replied 26 March 2009

Hotel can't charged service tax on food bills.

Amit kedia (article) (200 Points)
Replied 26 March 2009

Yes VAT and Service Tax can be applicable in the Hotel.

if hotel is providing any service at the time of dinner or lunch like mandap keeping or catering then it can charge both vAT and service tax in the appropriate ratio

ANANDH SUNDAR (Bharti Airtel) (1623 Points)
Replied 26 March 2009

Hotels are covered under "Convention Service" or "Mandap Keeper Service"(note that since they cater at their OWN premises, outdoor catering service is not attracted).

Under the above 2 services, hotels can take an abatement(viz charge service tax on 40% of the bill value). However, many simply do not bother or care to do so.

Regarding VAT, the normal VAT rate of 12.5% is applicable on hotel food. This is over & above luxury tax etc if any applicable.

1 Like

Divya Karthik (S) (459 Points)
Replied 07 April 2009

What is the Vat Rates applicable in Computer Software Exporting Company?

Madhukar N Hiregange (Chartered Accountant) (38934 Points)
Replied 08 April 2009

Originally posted by :S. Banerjee
"	I have observed that one of the most famous 5 star hotel in kolkata charges both service tax and VAT on their total Bill value. Do you have any knowledge on this? is it covered under any notification if so pl inform me. Thanks in advance, S. Banerjee 9433050121 banerjee.sambhu @ rediffmail.com	"

Dear Banerjee,

If it is a restaurant then they can only charge the VAT and no service tax.

If a mandap etc then ST and VAT can be charged on portions with no overlap as per the decision of the SC in the case of BSNL - on value of services no VAT is chargeable and on value of sale no service tax is chargeable.

akbar (accountant) (27 Points)
Replied 01 April 2010

hotel bsiness vat notification

Thiru (Manager - Accounts) (34 Points)
Replied 25 May 2010

Hi Experts,

Kindly let me know the VAT rates applicable to Hotels & Resturatants.

Thanks

ThiruKumaran

Anandamoy Dutta (Accountant) (21 Points)
Replied 26 May 2011

Hi Exparts,

I am an accountant of a Construction company. I have receive a bill towards advertisement fees for the display space for advertisement on their Hoardings for Rs 2500 plus Service tax Rs 257.52 plus Vat @ 13.5% Rs 37.23.

So kindly let me know both service tax & Vat can be charged on the above bill?

Thanks

Anandamoy Dutta

Madhukar N Hiregange (Chartered Accountant) (38934 Points)
Replied 26 May 2011

The FA 2011 has bought in a levy of ST on ac restaurants which have a license to serve liquor. However they provide an abatement and the same is not on the gross amount.

CA Unnikrishnan Nair N (Chartered Accountant) (2083 Points)
Replied 26 May 2011

Sale of food and beverages attracrs vat. Room sale and related service attrats serviec tax and luxury tax. Liuquer servved a/c restaurant attarcts service tax and vat.

Rajiv Sinha (Manager Excise) (51 Points)
Replied 27 May 2011

They can not charge both taxes on same item. It may be service charges not service tax. Please re-check the same.

Regards,

Rajiv

Shekhar (Accts Profes) (21 Points)
Replied 10 November 2011

Sir,

In chattisgarh sales tax act, vat is levied on a transfer of the right to use any goods including leasing thereof for any purpose, so if we are hiring machinary we have to pay vat on it. Then in this case whether we are liable to service tax also.