Rate of tax on outdoor catering services

This query is : Resolved 

24 April 2013

Dear Sir,

1. As per Rule 2C of valuation rules, the taxable portion of outdoor catering service is 60%, where as as per Notification 26/2012, it is 70%. Which is the actual rate to apply?

2. This rate has to be applied on gross amount (including services) - is it right ?

3. As per the above, if 70%, the effective rate will be 8.652% (100*70%*12.36%) - am I right ?

4. If the assessee has the right to pay service tax on the whole amount (including material cost) and then to avain cenvat credit on input services ?

Please share your views as early as possible.

Thanks in advance...


CA Vikas Acharya (Expert)
24 April 2013

70% when bundled services, i.e, with food supply there is also pandal shamiana etc services from your side
in case only outside food is being supplied by you rule 2A applicabel.
2. yes
3. perfect
4. input services allowed as per given in 2A or 26/2012, whatever you are using, in both cases ccr on input service allowed, as mentioned in the respective notifications

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