Service tax on canteen bil


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Querist : Anonymous

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Querist : Anonymous (Querist)
02 June 2012 Our company is a private limited and engaged in steel processing (slitting & shearing). We are providing foods ( break fast, lunch, dinner) to our employees through canteen contractor. The contractor raising the bill for food & services charges and charging service tax amount for entire amount.

Whether service tax applicable to entire canteen bill amount or service bill amount only ?

02 June 2012 The contract of catering involves both the elements of sale and service and VAT is applicable on the entire consideration including element of service due to amendment in the constitution regarding the said clause. So far as the service tax liability is concerned, the canteen contractor is likely to be covered under the outdoor caterer services where abatement of 50% is allowed on account of value of materials.


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