New abatement rates (service tax)

 Abatement for Servies is provided by way of 2 notifications.

1. Notification No. 24/2012 - Service Tax Valuation Rules states the abatement provisions in case of works contract service and restaurant srvice.
2. Notification No. 26/2012 - General Abatement for other services.

There are no further notifications in relation to abatement of services.

You can get these notifications from the CBEC website.

www.cbec.gov.in

@ Ca Ganesh Kartik,

W.E.F. : 01.07.2011 new services Restaurant and Hotel services were included in the net of Service Tax.With abatement rates of 70 % - Restaurant and 60 % on Rooms.

But as per new notificatopm is there any changes in the said rates ?

Dear Parthraj, providing the extracts of the relevant notifications. Hope this clarifies your doubts.

Notification No. 26/2012 :

Renting of hotels, inns, guest houses, clubs, campsites or other commercial places meant for residential or lodging purposes. - Service Tax payable on 60% of the value provided CENVAT credit on inputs and capital goods, used for providing the taxable service, has not been taken under the provisions of the CENVAT Credit Rules, 2004.

Notification No. 24/2012:

Determination of value of  service portion involved in supply of food or any other article of human consumption or any drink in a restaurant or as outdoor catering.- Subject to the provisions of section 67, the value of  service portion,  in an activity wherein goods   being  food or any other article of human consumption or any drink (whether or not intoxicating) is supplied in any manner as a part of the activity at a restaurant or as outdoor catering, shall be the specified percentage of the total amount charged for such supply, in terms of the following Table, namely:-

Table

Explanation 1.- For the purposes of this rule, “total amount” means the sum total of the gross amount charged and the fair market value of all goods and services supplied in or in relation to the supply of  food or any other article of human consumption or any drink(whether or not intoxicating), whether  or not  supplied under the same contract or any other contract, after deducting-

(i) the amount charged for such goods or services,  if any; and

(ii)  the value added tax or sales tax, if any, levied thereon:

Explanation 2.- For the removal of doubts, it is clarified that the provider of taxable service shall not take CENVAT credit of duties or cess paid on any goods classifiable under Chapters 1 to 22 of the Central Excise Tariff Act, 1985 (5 of 1986).”.

Dear All,

We have a Vendor who is supply food at our company and he has a restaurent and he is registered in service tax wiht category "Outdoor catering",

Kindly advice on what rate of percentage  should be taxable and what rate abatement on his bill with effect from 01.07.12.

kindly reply urgentely.

Regards

Dear Parthraj Parmar and Vishnu,

Have you both gone mad, updating the wrong abatement rates and parmar is also asking about change in rates even after posting the wrong rates. Please Vishnu don't answer any query untill you are 100 % sure about your answer. As caclubindia is the most popular site for CA students, these kinds of answers can misguide, them.

Regards,

Searcher for the abatement rates and misguided by the above answer,

Rajat Goyal

Sir,