23 March 2012
Is Service Charge Covers Under Abatement Scheme???? For eg- Bill of Restaurant
Food 100 Beverage 100 Service Charge 50
VAT(200*12.5%) 25 Service Tax({(100+100+50)*30%}*10.3%) 7.725
Question is:-
IS VAT & SERVICE TAX CALCULATION IS CORRECT????
Are VAT should also be considered in calculating Service Tax i.e, Service Tax({(100+100+50+25)*30%}*10.3%) 8.4975 ??????? Even If company opts for Composition Scheme????????
First of all, the rate of service tax is changed to 12.36% and it will be charged on 40% of the total amount.(W.E.F 01/04/2012) Total amount shall not include the amount of VAT Charged on the bill. there is no composition scheme as such in service tax.opting of Composition scheme under VAT does not alter the answer.
31 March 2012
Dear Deepak, The CBEC vide notification no 11/2012 dated March 17, 2012 notified Service Tax (Determination of Value) Amendment Rules, 2012. Vide the said rules, the taxable value of consumption at a restaurant shall be 40% of Gross bill amount excluding VAT. There is no concept of abatement here. If it is for outdoor catering, then 60% shall be substituted in above. If the goods are supplied at free of cost and cost is not ascertainable, then fair market value of such goods and services shall be taken.
02 April 2012
Earlier the Abatement on hotel accomodation was 50% now it is reduced to 40% in the proposed budget. For meals- If it is provided by a restaurant then value of taxable service will be 40% of the gross amount charged(i.e 60% abatement) If it is outdoor cateror, then value of taxable service will be 60% i.e 40% abatement.
CAclubindia
