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Discussion > Service Tax > Queries >

Service tax restaurent

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Practice


[ Scorecard : 3024]
Posted On 21 May 2012 at 12:34 Report Abuse

 

 
Please see Rule 2C in the above Budget notification.. What effect does it have on the valuation of restaurent service??
 
 
Also there is another notifiation which is as follows
 
 
Point 4 of this notification gives abatement..
 
So then what will be total Service Tax after both these notifications on a Bill of Rs. 10000(Ten thousand)

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CA Ashwani Agarwal
Practice


[ Scorecard : 3024]
Posted On 21 May 2012 at 12:35

This is Rule 2C

 

 

“2C. Determination of value of taxable service involved in supply of food and drinks in a restaurant or as outdoor catering.- Subject to the provisions of section 67, the value of taxable service involved in the supply of food or drinks for consumption either in a restaurant or as outdoor catering service, either by itself or along with other services, shall be the percentage of total amount, specified in column 3 against the respective descripttion of services mentioned in the following Table:-

Table

Sl.

No.

Descripttion

Percentage of

 total amount

1

2

3

1.

Service involved in the supply of food or any other article of human consumption or any drink  at a restaurant

   40 

2.

Service involved in the supply of food or any other article of human consumption or any drink  as outdoor catering service

   60   

 

 

Explanation 1.- For the purposes of this rule, “total amount” means the sum total of the gross amount and the value of all goods, excluding the value added tax, if any, levied on goods or services supplied free of cost for use in or in relation to the supply of food or any other article of human consumption or any drink, under the same contract or any other contract:

           

            Provided that where the value of goods or services supplied free of cost is not ascertainable, the same shall be determined on the basis of the fair market value of the goods or services that have closely available resemblance.

 

Explanation 2.- For the removal of doubts, it is clarified that any goods classifiable under chapter 1 to 22 of the Central Excise Tariff Act, 1985 (5 of 1986) meant for human consumption shall not be considered as “inputs” for the service portion in an activity wherein goods, being food or any other article of human consumption or drink is supplied in any manner as part of the activity.”.

 





CA Ashwani Agarwal
Practice


[ Scorecard : 3024]
Posted On 21 May 2012 at 12:37

So does it means that on a bill of Rs. 10000 in restaurent, the value of servie will be taken as Rs. 6000 only????




CA Ashwani Agarwal
Practice


[ Scorecard : 3024]
Posted On 21 May 2012 at 12:39

So does it means that on a bill of Rs. 10000 in restaurent, the value of servie will be taken as Rs. 6000 only????




CA Ashwani Agarwal
Practice


[ Scorecard : 3024]
Posted On 21 May 2012 at 12:40

Also here is the notification number 13

 

 

Notification No. 13/2012- Service Tax

New Delhi, the 17th March, 2012

 

 

            G.S.R.    (E). - In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994) (hereinafter referred to as the said Finance Act), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the taxable service of the descripttion specified in column (2) of the Table below, from so much of the service tax leviable thereon under section 66B of the said Finance  Act, as is in excess of the service tax calculated on a value which is equivalent to a percentage specified in the corresponding entry in column (3) of the said Table, of the gross amount charged by such service provider for providing the said taxable service, subject to the relevant conditions specified in the corresponding entry in column (4) of the said Table, namely;-

 

Table

 

Sl.No.

Descripttion of taxable service

Percentage

Conditions

(1)

(2)

(3)

(4)

1

Financial leasing services including equipment leasing and hire purchase

10

Nil.

2

Transport of goods by rail

30

Nil.

3

Transport of passengers, with  or without accompanied belongings by rail

30

Nil.

4

Supply of food or any other article of human consumption or any drink, in a premises, including hotel, convention center, club, pandal,shamiana or any place specially arranged for organizing a function

70

CENVAT credit on any goods classifiable under chapter 1 to 22 of the Central Excise Tariff Act, 1985 (5 of 1986) used for providing the taxable service has not been taken under the provisions of the CENVAT Credit Rules, 2004.

 



CA Ashwani Agarwal
Practice


[ Scorecard : 3024]
Posted On 21 May 2012 at 12:46

This means that Abatement is given at 30% of the value of all the goods.

 

Which means that on the value above calculated of Rs. 6000 (60% of 10000), there will be tax @ 8.4% only(as 30%) abatement.

 

So tax will be Rs. 504.00

EC will be Rs.10.08

SHEC will be Rs. 5.04???

 

Is this the correct and proper working or is there any wrong interpretation in this??

Please reply at the earliest.

 

Thank you.




Pinky Agarwal
C.A Final Student


[ Scorecard : 396]
Posted On 21 May 2012 at 13:42

Originally posted by : CA Ashwani Agarwal

This means that Abatement is given at 30% of the value of all the goods.

 

Which means that on the value above calculated of Rs. 6000 (60% of 10000), there will be tax @ 8.4% only(as 30%) abatement.

 

So tax will be Rs. 504.00

EC will be Rs.10.08

SHEC will be Rs. 5.04???

 

Is this the correct and proper working or is there any wrong interpretation in this??

Please reply at the earliest.

 

Thank you.

Simultaneous benefit under both Notification No. 13 and Service tax determination of value rule can not be availed..

I think Rule 2C of Service tax Determination of  Value rule is specifically given for restaurants and this rule will apply in this case...

That is service tax will be payable on 40% of the total value..

Regards,

Pinky Agarwal.


 




Pinky Agarwal
C.A Final Student


[ Scorecard : 396]
Posted On 21 May 2012 at 13:43

Originally posted by : CA Ashwani Agarwal

This means that Abatement is given at 30% of the value of all the goods.

 

Which means that on the value above calculated of Rs. 6000 (60% of 10000), there will be tax @ 8.4% only(as 30%) abatement.

 

So tax will be Rs. 504.00

EC will be Rs.10.08

SHEC will be Rs. 5.04???

 

Is this the correct and proper working or is there any wrong interpretation in this??

Please reply at the earliest.

 

Thank you.

Simultaneous benefit under both Notification No. 13 and Service tax determination of value rule can not be availed..

I think Rule 2C of Service tax Determination of  Value rule is specifically given for restaurants and this rule will apply in this case...

That is service tax will be payable on 40% of the total value..

Regards,

Pinky Agarwal.

 




BASAK
NA


[ Scorecard : 40]
Posted On 22 May 2012 at 23:42

Service Tax on Restaurant Service:

Sir,

if there is a restaurant with AC facility without BAR, will he be liable to pay service tax (turnover > 12,00,000/-) ?




BASAK
NA


[ Scorecard : 40]
Posted On 23 May 2012 at 00:03

Service Tax on Restaurant Service:

A restaurant has got himself registered with the service tax and also VAT. Then how can anyone calculate Service Tax and VAT?

                       Total Bill

(-)                   Abetment

=                    Taxable Service (after abetment) 

(+)                  Service Tax  

=                     Taxable Service+Service Tax

(+)                  VAT.....% on (Taxable Service+Service Tax)                   OR

(+)                  VAT....% on (Total Bill)

 



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