Catering Servie

This query is : Resolved

Himanshu Tandon (Querist)
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01 August 2007 My client is a caterer and he is avinling 50% abaitment on supply of food and Catering Servie. but he is showing the sale of food sapretly and Catering service seprately in a single bill. and paying sales tax on sale of food amount. the food portion is about 80% and Service Prtion is only 20% but department is providing abatement only 50%.
now my qussion is as under:-

1. weather he shall charge service tax on only catering service when food is billied sapretly in single bill and trade tax is paid on it.

2. whether abatement is allowed 50%when both supply and service are single biled and saprate figures.

Himanshu Tandon
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CA Prasanna Krishnan V

CA Prasanna Krishnan V (Expert)
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04 August 2007 Dear Sir/Madam

Notfn No 12/2003 permits one to deal sale of goods separately.

But if you avail the benefit thereof, you are not eligible for any abatement (in your case 50%). Hence you will have to charge full rate of Service Tax - 12.36% on service content.

From your version I understand that Rs 80 will be food bill and Rs 20 will be service Charge (unambicuous documentation is must).

Hypothetically, then, the service tax at 12.36% will be Rs 2.47.

If you go by abatement stream, 12.36% * Rs 50 = Rs 6.18.

But please decide after considering the State Trade (commercial) tax impact in both the options.