Service tax applicability on industrial canteen
This query is : Resolved
27 March 2016
Can someone let me know about service Tax applicability on canteen situated in a manufacturing industry? The canteen is run by a outdoor caterer. Workers purchase the coupons from caterer @Rs.7.00 per plate and the caterer charge balance Rs. 15.00 from the industry. Total cost per plate is Rs. 22.00. Thus the industry is charging nothing from the workers.
Now my question is what is the ethical practice being followed by the such industries pertaining to service tax applicability?
Those who are practically dealing such cases are requested to share their views.
Now my question is what is the ethical practice being followed by the such industries pertaining to service tax applicability?
Those who are practically dealing such cases are requested to share their views.
27 March 2016
Industrial canteens are exempted from service tax.
Message likes :
2 times
24 July 2025
Yes, you’re right — service tax is generally not applicable on industrial canteen services.
Here’s a quick summary:
Industrial canteen services provided by an outdoor caterer to the employees of a manufacturing industry are exempt from service tax under the Mega Exemption Notification (Notification No. 25/2012-ST and subsequent updates).
The reasoning is that these canteen services are considered welfare services to the employees and not commercial catering to the public.
Even if the canteen is run by an external caterer, as long as it’s exclusively for the industry’s workers and not open to outsiders, service tax exemption applies.
The pricing structure where workers pay a nominal amount and the industry subsidizes the rest does not affect the exemption.
Ethical/Best Practice:
Industry should maintain proper documentation that the canteen services are for employees only.
Keep contracts/agreements with the outdoor caterer clearly indicating the nature of services.
Avoid any commercial catering to outsiders through the canteen.
Here’s a quick summary:
Industrial canteen services provided by an outdoor caterer to the employees of a manufacturing industry are exempt from service tax under the Mega Exemption Notification (Notification No. 25/2012-ST and subsequent updates).
The reasoning is that these canteen services are considered welfare services to the employees and not commercial catering to the public.
Even if the canteen is run by an external caterer, as long as it’s exclusively for the industry’s workers and not open to outsiders, service tax exemption applies.
The pricing structure where workers pay a nominal amount and the industry subsidizes the rest does not affect the exemption.
Ethical/Best Practice:
Industry should maintain proper documentation that the canteen services are for employees only.
Keep contracts/agreements with the outdoor caterer clearly indicating the nature of services.
Avoid any commercial catering to outsiders through the canteen.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- CG Tax On residential property
- Post Office RD Interest
- Applicable TDS for Purchase of Flat from NRI
- Building and other construction workers welfare cess act 1996
- Claiming exemption of perquisite for employee-owned car under New Tax Regime in ITR-2
- Eway bill for machinery reparing
- ITR 3 FILING OF AN INDIVIDUAL (PARTNER IN A PARTNERSHIP fIRM)
- Gift of mutual fund units to daughter
- Form 10BD Filling
- TDS ON CASH WITHDRAWALS...
- Delisted shares sold in off market/ Rebate u/s87A
- In Exports Sales HSN details where to fill
- Opting out" of regime provided under subsection (1A) of Section 115BAC but Form 10IEA is not filed.
- Difference in tax comparison report
- Gst invoice numbering and delivery challan numbering
- Sales amount in Gstr1
- E Commerce GSTR1 & 3B how to file
- GST Cancellation without jurisdiction
- Legal Opinion on Registrar's Refusal to Investigate a Society for Non-Renewal and Non-Compliance
- GST Refund_RFD-01
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
