Restaurant service

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

16 October 2013 if a hotel is having ac restaurant and serving the food to the visitors who come to restaurant and also serving the food to occupier of rooms in the hotel in their rooms. would service tax is levied.

in the above situation if the hotel is having non ac restaurant but having ac is their rooms and air heating system in lobby etc would the service tax is levied

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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16 October 2013 Levy is unconstitutional as per Kerala High Court verdict. Details are given in https://www.caclubindia.com/articles/service-tax-on-restaurants-and-hotels-18617.asp

Querist : Anonymous

Querist : Anonymous (Querist)

19 October 2013 it unconstitutional as per kerala high court but government may change in the constitution to nullify the decision as we already seen in case of renting of immovable property, than it will be taxable

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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21 July 2025 Here’s a clear summary about service tax on hotel restaurant services in your scenario:

1. AC Restaurant & Food served to:
Visitors coming to restaurant: Service tax is levied on the restaurant service if the restaurant is air-conditioned (AC).

Food served in rooms (to occupiers of hotel rooms): Service tax is also levied on food served in rooms by the hotel, provided the hotel has declared it as a service taxable under “restaurant service.”

2. Non-AC Restaurant with AC rooms and air heating in lobby:
If the restaurant itself is non-AC, then no service tax on restaurant service on food served in the restaurant.

However, if the rooms are air-conditioned, the service tax will apply on accommodation services for the rooms (which is a separate taxable service).

Service tax is not levied on the restaurant service for non-AC restaurants even if the rooms or lobby are AC.

Important:
There was a Kerala High Court judgment that struck down service tax on certain restaurant services as unconstitutional. However, the government can override this by amending law/constitution.

So, keep checking the latest government notifications and rulings.

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