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VAT on service charges in hotels

This query is : Resolved 
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(Querist)
28 May 2008 pl clarify on the following -
hotel tariff goes like this :
Service charges 3 % on Room Sales ;
5 % on F & B sales
VAT : 12.5 % on F & B

Restaurant bill goes like this -

Food sales : 1,000
Service charges -5% : 50
total : 1,050
K - VAT - 12.5 % : 131
Total : 1,181

Is this correct ? does service charges attract K VAT ?

please clarify
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m s c shekar

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m s c shekar (Querist)
17 June 2008 definition of sale includes service in hotels, therefore K VAT is at 12.5% on that
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CA. O.P. Agarwalla

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CA. O.P. Agarwalla (Expert)
19 September 2008 Agreed
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