Service tax on sale of food & beverages items at Cinema hall

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This discussion clarifies the service tax and GST implications for food and beverage sales in cinema halls. Initially, VAT was paid on packed food, but the consensus is that GST is now applicable at 18%. For the service tax period (FY14-15 onwards), a 60% abatement was available, meaning service tax was payable on 40% of the food supply value, with rates including Swachh Bharat Cess and Krishi Kalyan Cess.

Ashwin

Ashwin (Querist)
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11 January 2022 Please give me case law or proper notification regarding Service tax on the sale of food and beverages in the Cinema hall

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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11 January 2022 As food and beverages supply in cinema halls fall under the supply of food/drinks in outdoor catering, they will attract 18% GST.

Ashwin

Ashwin (Querist)
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11 January 2022 Sir, its just packed food purchase and sale to people in cinema hall on which we are paying VAT so Service tax is applicable,

Any Abatement is there please suggest.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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11 January 2022 No VAT applicable only GST applicable.

Ashwin

Ashwin (Querist)
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11 January 2022 Sir, Thank you for your reply but please note that our Service Tax scrutiny is going on for f.y.14-15 onward so I need to know that sale of packed food will attract service tax which sale in cinema canteen

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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11 January 2022 The rate of service tax is 14%, and along with Swachh Bharat Cess of 0.5%, the amount charged to us is 14.5%. From June 1, 2016, Krishi Kalyan Cess of 0.5% will also be added to this, making the total service tax from June 1 onwards, 15%.
60% abatement available. Service tax payable on 40% value on food supply.

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