Abatement rate & notification number

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NIKUNJ SHAH (Querist)

27 June 2014 please Gide me for current abatement rate & notification no applicable for AC restaurant service as I want to file service tax return.thanx in advance.

CA PRAMOD SARAOGI

CA PRAMOD SARAOGI (Expert)

28 June 2014 The Government vide S. No. 19 of Mega Notification No. 25/2012-ST dated June 20, 2012 (“Notification 25/2012”) granted exemption from payment of service tax to restaurants, eating joint or a mess providing service in relation to food or beverages, other than those having:
(i) facility of air-conditioning or central air-heating in any part of the establishment, at any time during the year, and
(ii) a license to serve alcoholic beverages.
Thus all AC restaurants having license to serve liquor were exigible to service tax.
However post Union Budget 2013-14, the Central Government vide Notification No. 03/2013-ST dated March 1, 2013 (“Notification 03/2013”) which came into effect from April 1, 2013 had amended S. No. 19 of Notification 25/2012, and deleted point (ii) thereof.
For the sake of clarity, it means that the exemption from service tax to restaurants, eating joints, mess etc. is available only when such restaurant doesn’t have the facility of air conditioning or central air heating in any part of the establishment, at any time during the year.
Resultantly, now, all air-conditioned restaurants, eating joints or a mess including eating joints or mess has come under the service tax net irrespective of fact whether they serve alcoholic beverages or not.

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