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Applicability of service tax?

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Alok

Private

21 Points Posted on 18 January 2015

Recently an AC Restaurant has been opened in my locality and i have been visiting it regularly.It's been open for for 5 months.

The restaurant doesn't levy service tax.It's an AC Restaurant doesn't serve liquors.

Questions i have

1.Does an newly opened restaurant gets abatement for first few years?

2.The restaurant is good and in my opinion it's transaction is going to be above 10 lacs easily.

Is the restaurant going to charge service tax only after it crosses 10 lacs of transaction on it's book.

3.Is it mandatory for AC restaurant to levy service tax, irrespective of transaction?

4.Is he doing any tax evasion wrt service tax?

Thanks

Replies (1)

MJ Krishnamurthy

ACCT(Retd)

5757 Points Posted on 18 January 2015

A new restaurant can wait for some time to see the trend of their business until it crosses Rs10 lakhs in a year.Some times when a hotel has started in later half of an FY it may not touch the limit in that year.So,exemption is available for that year.In the next FY the hotellier can wait for some more time to reach the taxable level and then go for registration and payment of ST.ST liability is there on hotels with abatement.....mjk