Service tax and vat on catering
This query is : Resolved
19 September 2014
Dear sir,
in our factory we received the food from catering service.food prepared outside of the factory and served in our canteen. Now our cater raise the bill without service tax,vat @2% only charged.
kindly advice,
is it correct or what we do this case .
in our factory we received the food from catering service.food prepared outside of the factory and served in our canteen. Now our cater raise the bill without service tax,vat @2% only charged.
kindly advice,
is it correct or what we do this case .
19 September 2014
It is correct in terms of N/N 14/ 2013- ST, dated 22nd Oct'13.
However, the said notification is subject to dual interpretations:
A) whether services provided by canteen in a factory is exempt?
B) Whether services provided(even by third party) in relation to serving of food by canteen in a factory are exempt?
In my view, the second interpretation holds good.
Therefore, the practise followed by service provider seems to be correct.
Furthermore, even if he doesn't charge, it shall not affect your liability.
However, the said notification is subject to dual interpretations:
A) whether services provided by canteen in a factory is exempt?
B) Whether services provided(even by third party) in relation to serving of food by canteen in a factory are exempt?
In my view, the second interpretation holds good.
Therefore, the practise followed by service provider seems to be correct.
Furthermore, even if he doesn't charge, it shall not affect your liability.
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