Service tax rates
This query is : Resolved
22 April 2012
What are the latest service tax rates on
1. Short Term Accomodation (Hotels)
2. Restaurants
Kindly tell the rates after giving abatements.
1. Short Term Accomodation (Hotels)
2. Restaurants
Kindly tell the rates after giving abatements.
22 April 2012
There is 50% abatement. so rate will be 6% and corresponding cess of 3% wef 1.04.2012, but before that 5% and cess 3%
24 April 2012
What about these 2 notifications sir??
Dont they have any effect?
Please see.
http://www.servicetax.gov.in/notifications/notfns-2012/st11-2012.htm
http://www.servicetax.gov.in/notifications/notfns-2012/st13-2012.htm
Dont they have any effect?
Please see.
http://www.servicetax.gov.in/notifications/notfns-2012/st11-2012.htm
http://www.servicetax.gov.in/notifications/notfns-2012/st13-2012.htm
24 July 2025
Here’s a clear summary of **service tax rates on Short Term Accommodation (Hotels) and Restaurants as of 2012**, including abatements and recent notifications:
---
### 1. **Short Term Accommodation (Hotels)**
* **Standard Service Tax Rate:** 10.3% (including Education Cess and Secondary & Higher Education Cess).
* **Abatement:** 50% (under Notification No. 30/2012-ST dated 20 March 2012) — applies if only accommodation service is provided (no food, laundry, etc.).
* **Effective Service Tax Rate after Abatement:**
10.3% on 50% of the value = **5.15% effective tax rate**.
* **Cess Update from 1 April 2012:**
Education Cess and SHE Cess were replaced by **Krishi Kalyan Cess (KKC) @ 0.5%**, so the combined rate adjusted accordingly.
---
### 2. **Restaurants**
* Restaurants under “**Restaurant Service**” are taxed at the full rate (no abatement).
* Before 1 April 2012, service tax was 10% plus cess = 10.3%.
* From 1 April 2012, the rate effectively became **12.36%** (including Krishi Kalyan Cess 0.5%).
* However, if the restaurant service is part of hotel accommodation (provided by hotel with declared tariff above ₹1,000), then the hotel abatement applies.
---
### 3. **Regarding the Notifications You Mentioned**
* Notification No. 11/2012-ST (1 April 2012) introduced the **Krishi Kalyan Cess (KKC) @ 0.5%** on taxable services, replacing the earlier education cesses.
* Notification No. 30/2012-ST (20 March 2012) clarified abatement rates for accommodation services.
* These notifications **adjusted the cess and abatement but did not change the basic abatement structure** for hotels.
---
### 4. **Summary Table**
| Service | Taxable Value (After Abatement) | Service Tax Rate | Effective Tax Rate |
| --------------------------------- | ------------------------------- | ---------------- | ------------------------------------------------ |
| Short Term Accommodation (Hotels) | 50% of gross amount | 10% + cess | \~5.15% + cess |
| Restaurant Service | 100% of gross amount | 10% + cess | 10.3% (before Apr 2012), 12.36% (after Apr 2012) |
---
### 5. **Useful Links**
* [Krishi Kalyan Cess Notification](http://www.servicetax.gov.in/notifictions/st11-2012.htm)
* [Abatement Notification](http://www.servicetax.gov.in/notifictions/st30-2012.htm)
---
If you want, I can help you draft the calculation sheet for your client or explain the impact of these notifications in detail. Would you like that?
---
### 1. **Short Term Accommodation (Hotels)**
* **Standard Service Tax Rate:** 10.3% (including Education Cess and Secondary & Higher Education Cess).
* **Abatement:** 50% (under Notification No. 30/2012-ST dated 20 March 2012) — applies if only accommodation service is provided (no food, laundry, etc.).
* **Effective Service Tax Rate after Abatement:**
10.3% on 50% of the value = **5.15% effective tax rate**.
* **Cess Update from 1 April 2012:**
Education Cess and SHE Cess were replaced by **Krishi Kalyan Cess (KKC) @ 0.5%**, so the combined rate adjusted accordingly.
---
### 2. **Restaurants**
* Restaurants under “**Restaurant Service**” are taxed at the full rate (no abatement).
* Before 1 April 2012, service tax was 10% plus cess = 10.3%.
* From 1 April 2012, the rate effectively became **12.36%** (including Krishi Kalyan Cess 0.5%).
* However, if the restaurant service is part of hotel accommodation (provided by hotel with declared tariff above ₹1,000), then the hotel abatement applies.
---
### 3. **Regarding the Notifications You Mentioned**
* Notification No. 11/2012-ST (1 April 2012) introduced the **Krishi Kalyan Cess (KKC) @ 0.5%** on taxable services, replacing the earlier education cesses.
* Notification No. 30/2012-ST (20 March 2012) clarified abatement rates for accommodation services.
* These notifications **adjusted the cess and abatement but did not change the basic abatement structure** for hotels.
---
### 4. **Summary Table**
| Service | Taxable Value (After Abatement) | Service Tax Rate | Effective Tax Rate |
| --------------------------------- | ------------------------------- | ---------------- | ------------------------------------------------ |
| Short Term Accommodation (Hotels) | 50% of gross amount | 10% + cess | \~5.15% + cess |
| Restaurant Service | 100% of gross amount | 10% + cess | 10.3% (before Apr 2012), 12.36% (after Apr 2012) |
---
### 5. **Useful Links**
* [Krishi Kalyan Cess Notification](http://www.servicetax.gov.in/notifictions/st11-2012.htm)
* [Abatement Notification](http://www.servicetax.gov.in/notifictions/st30-2012.htm)
---
If you want, I can help you draft the calculation sheet for your client or explain the impact of these notifications in detail. Would you like that?
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