Applicability of service Tax
This query is : Resolved
Amar Shrikhande
(Querist)
09 March 2011
Dear Frends
As per amendments of finance act 2011, Service Tax is being imposed on Services provided by air-conditioned restaurants having a license to serve alcoholic beverages in relation to serving of food and /or beverages.
One of our client having air-conditioned restaurants & licence to serve the alcoholic beverages. The restaurants also attached garden, he sales his product in AC rooms as well in garden also, where will service tax apply as per new laws ? Only in sales in AC rooms or AC rooms as well in gardens also?
Waiting for your valuable suggestion!!!!!!!!!!!
As per amendments of finance act 2011, Service Tax is being imposed on Services provided by air-conditioned restaurants having a license to serve alcoholic beverages in relation to serving of food and /or beverages.
One of our client having air-conditioned restaurants & licence to serve the alcoholic beverages. The restaurants also attached garden, he sales his product in AC rooms as well in garden also, where will service tax apply as per new laws ? Only in sales in AC rooms or AC rooms as well in gardens also?
Waiting for your valuable suggestion!!!!!!!!!!!
CA Navin Jain
(Expert)
09 March 2011
sales only in AC room
09 March 2011
The answer to the querry is not in the bill or in the speech of the Finance minister. However. Govt. of India, Ministry of finance, depatment of revenue has brought out a letter D.O.F No. 334/3/2011-TRU dated February 28,2011 which contains certain vital indications to the issue in clause 1.4 and 1.5 to Annexure-A which is reproduced below.
1.4. The new levy is directed at services provided by high-end restaurants that are air conditioned and have licence to serve liquor. It should not be confused with mere sale of food at any eating house,where such services are materially absent or so minimul that it will be difficult to establish that any service in any meaninful way is being provided.
1.5 It is not necessary that the facility of air conditioning is available round the year. If the facility is available at any time during the year the conditions for the levy shall be met.
From a reading of the above, an air conditioned restaurant having liquor licnece serving liquor in garden is liable to pay service tax for the services done in the garden also.
Now this is only a finace bill which has to obtain assent of both houses of the parliament and the President of India and therefore, pare 1.6 of above referred letter says " relevant notification will be issued when the levy is operationalized.So wait for that till u take a final decision.
1.4. The new levy is directed at services provided by high-end restaurants that are air conditioned and have licence to serve liquor. It should not be confused with mere sale of food at any eating house,where such services are materially absent or so minimul that it will be difficult to establish that any service in any meaninful way is being provided.
1.5 It is not necessary that the facility of air conditioning is available round the year. If the facility is available at any time during the year the conditions for the levy shall be met.
From a reading of the above, an air conditioned restaurant having liquor licnece serving liquor in garden is liable to pay service tax for the services done in the garden also.
Now this is only a finace bill which has to obtain assent of both houses of the parliament and the President of India and therefore, pare 1.6 of above referred letter says " relevant notification will be issued when the levy is operationalized.So wait for that till u take a final decision.
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