Service tax rate on banquet food and food served in room

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SIJU VARGHESE (Querist)
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06 June 2016 Dear Sir,

I am getting different opinion on taxation of Banquet Hall Rent, Banquet Food and Food served in Room.

So please clarify the following queries:

What will be the rate of Service Tax on Banquet Hall Rent and Banquet Food if both are separetly shown in a single bill?
What will be the rate of Service Tax on Food Served in Room if Room Rent and Food is separetly shown in a single bill?

Thanking you

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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06 June 2016 1 In case of banquet hall, food is also served service tax payable on 70% of bill value including food.
2 Service tax on 60% value payable on room rent and service tax on 40% value payable on food served in room.

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SIJU VARGHESE

SIJU VARGHESE (Querist)
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07 June 2016 Dear Sir,
Thanks for your reply..
Sir, can you please quote the respective Circular/Notification/Case Law.
Because, as per the Circular No. 139/8/2011-TRU dt.10/05/2011;
"When the food is served in the room, service tax cannot be charged under the restaurant service as the service is not provided in the premises of the air-conditioned restaurant with a licence to serve liquor. Also, the same cannot be charged under the Short Term Accommodation head if the bill for the food will be raised separately and it does not form part of the declared tariff".
Then how it can be taxed and under which head the food served in room comes?

And also, in the case of Banquet Hall Rent and Banquet Food, the Notification No. 26/2012 dt.20/06/2012 is mentioned about bundled service, that means composite service which cannot be separated. If we can separate the Hall Rent and Rate for Food, then how it can be taxed under this notification?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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07 June 2016 I agree with your point on room service. But it may fall under outdoor catering service.
In case of Banquet hall when food is served it will be treated as bundled service.

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