Service tax on restaurants bill

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Viplov Surana (Querist)
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21 June 2015 A restaurant bill for food (excluding VAT , Service Tax,etc) amounts to Rs.1000/- (say) & service charge is seperately shown in bill @10% on above I.e. Rs. 100/- and after that VAT is charged. Now my question is whether service tax (which is 5.26%) will be charged on Rs. 100 (I.e. Rs. 5.26/-) or on Rs. 1100 (1000 + 100). Since Service Charges are shown seperately, Service Tax should be charged on Service element only. But the restaurant bill shown Service Charges separately but charged Service Tax on total amount Rs.1100. Kindly advise me in this regard Regards CA Viplov Surana

CMA MALHAR BEHERA

CMA MALHAR BEHERA (Expert)
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22 June 2015 Service tax levied on Rs. 1100.
Service tax is different from the service charges. It is a tax levied by the government. This is 14% percent and payable on 40 percent of your total bill, which includes food, drinks, service charge and served in an air-conditioned restaurant only.

Rupesh Jain

Rupesh Jain (Expert)
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22 June 2015 you have to charge service tax n rs. 1100/- @ 14% on 40% of the service tax rate

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