Go AD-Free with CAclubindia PRO for Rs 167/Month Only. Subscribe Now!

FBT on Hospitality (Food and beverages) in hotel Industry

Others 1020 views 5 replies

Shuchi Gupta

16 Points Joined August 2007

Please help me with levy of FBT on the following:-

1. Client is engaged in the business of running a luxury hotel/ resort.

2. There is expenditure incurred on food and beverages provided to: -

Guest (with Charge: who are billed for provision of food and services)

-Complementary Guest (who are not billed for any food and related services).

Thanks and regards

Replies (5)

Surya Jain

Student

944 Points Joined October 2008

here you have to take 20% for FBT calculation.

suppose you have incurred 1000 Rs. then you have to pay FBT on 200(20% of 1000).

FBT will be leviable only in second case i.e. Complementary Guest because the expenditure in respect of them is debited to the profit and loss account. In first case there is no question of levy of FBT because its not an expense, there will be profit of sale-cost of service.

Thanks

CA Anand Shukla

33 Points Joined May 2007

Shuchi Gupta

16 Points Joined August 2007

Originally posted by :CA Anand Shukla
"	Thanks Anand	"

Anil Kumar Arora

manager finance

37 Points Joined January 2009

Hi Shuchi

I am working with a big hotel group and worried for the same type of queries. I think we can help each other on these type of problems. If you are treating complemantry guest as a part of your sales promotion than you have to pay FBT @ 20%. So first you have to decided the you are giveing complementry service to which type of guests.

CA Anil Kumar Arora