What is take away goods? Whether Service Tax is charged on taken away goods for A/C Restaurant?
Bansi Shah (-) (68 Points)
02 November 2013What is take away goods? Whether Service Tax is charged on taken away goods for A/C Restaurant?
Manoj Agarwal
(Service Tax Consultant Rourkela ServiceTaxExpert@yahoo.com)
(3456 Points)
Replied 02 November 2013
When we visit any restaurant or eating joint and order food to be packed to be taken away for eating elsewhere is take away food. In my view, such take away food is not taxable.
One Of A Kind
(CA Final & CS Professional Student)
(187 Points)
Replied 02 November 2013
Take away goods are packaged goods having MRP printed on them. As, these are take away goods, the customer does not take the benefit of A/c service and hence no ST is required to be charged. Further, there is no service element and is purely in the nature of sale of goods.
CA Mukesh Goyal
(Assistant Manager)
(143 Points)
Replied 02 November 2013
In my point of view , air-conditioned restaurants or fast-food outlets, such as McDonald’s or Pizza Hut, which provide takeaway services will not get any service tax relief till date and liable to pay service tax if such facilities are provided at the same shop where one can sit and eat or drink beverages.
If goods are sold on MRP basis (fixed under the Legal Metrology Act), these have to be excluded from the total amount for the determination of value of the service portion.
Bansi Shah
(-)
(68 Points)
Replied 02 November 2013
There is liability to collect service tax on takeaway goods for air conditioned and Luxurious Restaurant. right???? is it also 4.94% service tax on takeaway food??
Manoj Agarwal
(Service Tax Consultant Rourkela ServiceTaxExpert@yahoo.com)
(3456 Points)
Replied 02 November 2013
Yes, the effective rate of Service Tax on AC Restaurant is 4.944% (i.e. 12.36% of 40% Value) as per Service Tax (Determination of Value) Rules, 2006.
The latest Circular No. 173/8/2013-ST dated 7-10-13 which has clarified at Doubt - 3 that if goods are sold at MRP basis (fixed under the Legal Metrology Act) they have to be excluded from total amount for the determination of value of service portion. Regarding the same, i had send letter to Shri V.K. Garg, Joint Secretary, TRU, CBEC some 4 months back. My contention is whether MRP or not, any goods which the restaurant purchase and sell as it is, (like cold drinks, chips, frozen food, etc) is trading activity covered under Negative List and outside the scope of service tax. Even if the goods are sold at above MRP (in violation of other laws), the character of the transaction is not changed and it remains trading activity. Unfortunately, the TRU never reverted on my communication.
Manoj Agarwal
(Service Tax Consultant Rourkela ServiceTaxExpert@yahoo.com)
(3456 Points)
Replied 02 November 2013
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