Service tax on restaurants

This query is : Resolved

R.SIVARAJ (Querist)
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24 July 2013 A non AC restaurant is providing restaurant services which is very adjacent to an AC bar run by a third party in the same building/floor. The annual turnover of the restaurant before availing abatement is 20 lakhs. Is the restaurant is liable to pay service tax?

Rajat Poddar

Rajat Poddar (Expert)
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24 July 2013 according to me.. yes ... liable to pay service tax..

Aashish Tiwari

Aashish Tiwari (Expert)
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24 July 2013 Services provided in relation to serving of food or beverages by a restaurant, eating joint or a mess, other than those having (i) the facility of air-conditioning or central air-heating in any part of the establishment, at any time during the year.

Here, it is specifically mentioned that if facility of air-conditioning is present in any part of establishment, then exemption is not available. I thought, ADJACENT PART Does not a part of establishment..

CA Mehta Ankur N.

CA Mehta Ankur N. (Expert)
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24 July 2013 Yes liable to pay service tax........ as in the same building there is air condition in any place , it will be covered.......

Aashish Tiwari

Aashish Tiwari (Expert)
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24 July 2013 In case, there is 4 floor in one building.. 2nd floor has 3 shop, 1 non a.c. restaurant, 2nd a.c. Hair saloon and 3rd is a.c. Bar.. Does bar and hair saloon is part of non a.c. Restaurants establishment ????... Please specify....
The notificatiön contains d word establishment not building.. I don't thnk ST is applicable.
Regards

RENGARAJ R.K

RENGARAJ R.K (Expert)
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24 July 2013 THIS HOTEL IS NON-AC AND ADJACENT PREMISES IS AC ATTACHED. DEBATABLE ISSUE.

IN MY OPINION, SERVICE TAX WILL NOT BE APPLICABLE TO THIS RESTAURANT ON ANY TURNOVER. THE IDEA BEHIND THIS IS,AC SHOULD NOT BE ATTACHED IN ANY PART OF THE ESTABLISHMENT AND IT SHOULD BE INTERPRETED IN THIS WAY i.e., THE SAME RESTAURANT SHOULD NOT HAVE TWO SECTION ONE IS AC AND OTHER IS NON-AC. I LEAVE IT TO OTHER EXPERTS.

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