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New abatement rates (service tax)

Parthraj Parmar (B.Com ARTICLE CA FINAL ) (63 Points)

28 June 2012

Can any one post new abatement list of service tax as per recent amendments ?

As per my knowledge new taxable portion for below mentioned services are as follows kindly correct me if I am wrong :

1.Restaurant Service in Hotel - New taxable portion - 40 %

2.Hotel Room Service - New taxable portion - 60 %

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7 Replies

vishnu (job) (75 Points)
Replied 28 June 2012

Dear Sir Kindly refer the notification 26/2012 ST dated 20.06.12 which provides you the rate of abatment for the certain services. Further the taxable portion for resturant services is 30% and renting of room in lodge is 40% which is effective from 1.07.2012

1 Like

CA Ganesh Karthik (Chartered Accountant) (368 Points)
Replied 29 June 2012

Abatement for Servies is provided by way of 2 notifications.

Notification No. 24/2012 - Service Tax Valuation Rules states the abatement provisions in case of works contract service and restaurant srvice.
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

Parthraj Parmar (B.Com ARTICLE CA FINAL ) (63 Points)
Replied 29 June 2012

@ 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 ?

CA Ganesh Karthik (Chartered Accountant) (368 Points)
Replied 29 June 2012

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

Sl. No.	Descripttion	Percentage of the total amount
(1)	(2)	(3)
1.	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	40
2.	Service portion in outdoor catering 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 such outdoor catering	60

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).”.

1 Like

Anand Kaushik (Executive Commercial) (41 Points)
Replied 30 August 2012

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

Rajat Goyal (Student CA Final ) (39 Points)
Replied 09 November 2013

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