Service tax on home delivery from restaurants

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This query is : Resolved

Gaurav Sureka (Querist)

12 November 2013 Dear Experts, Need your help, can u tell me if a person orders home delivery from a partly air conditioned restaurant then is the rule of reverse charge of service tax applicable i.e is the hotel entitled to charge the 40% 12.63 of service tax in the bill. For eg if i order a home delivery of food of Rs 100 from a partly air conditioned restaurant the total of bill is 100 so do i have to pay service tax ob Rs 100 or not coz in my locality one hotel is charging and the other one is not so which one is right

Nikhil Kaushik

Nikhil Kaushik (Expert)

13 November 2013 there is lack of clarity on service tax application on home delivery services. An explanation from Service tax department is expected on this issue.

Suresh Ramaswamy

Suresh Ramaswamy (Expert)

19 November 2013 According to Mr.V.S.Datey in an article on this subject, the service tax is leviable on services rendered in the A/C restaurant. If a restaurant has both A/C and non A/C wing then the services rendered in the non A/C wing is not taxable.

Further home delivery of food stuff is not services rendered in an A/C restaurant and hence no Service Tax can be levied.

Keeping in view the status Mr. Datey enjoys in the IDT world, I humbly fully endorse his view, which not only appears correct but is also logical.

I beg to differ from the expert Mr. Nikhil Kaushik.

Nikhil Kaushik

Nikhil Kaushik (Expert)

19 November 2013 Dear Ramaswamy Ji,

I have read that article too but unfortunately service tax department doesn't base their views on the option of Hon'ble Datey ji.

As a cautious stand, it would a fool's errand to give a client an opinion where no proper clarity is available, leaving him/her exposed to litigation.

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