Service tax abatement

value of taxable services shall not included sale of goods at MRP and sale of food at the counter or home delivery services. An abatement of 70 percent shall be allowed to allow for deemed sale of food and other costs vide Notification No. 34/2011-ST dated 25.4.2011 wef 1.5.2011 which amends Notification No. 1/2006-ST The exemption shall be available on the gross price / amount charged by the restaurant for the taxable services provided and it shall include any amount shown separately in the breakup of gross amount such as service charges or service surcharge or special cover charges. However, following amounts shall be excluded from the gross value – a) amount paid the customer as ex gratia, generally called as tip meant for staff members. b) local taxes including entertainment tax. c) sales tax or VAT charged on food sale. d) sale value of goods sold at MRP. e) delivery charges (for home delivery service) Many restaurants charge event charges and special prices such as on Christmas eve, new year eve, various functions / programmes / food festivals or during live screening of matches etc. Such amounts shall also be liable to service tax.

value of taxable services shall not included sale of goods at MRP and sale of food at the counter or home delivery services. An abatement of 70 percent shall be allowed to allow for deemed sale of food and other costs vide Notification No. 34/2011-ST dated 25.4.2011 wef 1.5.2011 which amends Notification No. 1/2006-ST The exemption shall be available on the gross price / amount charged by the restaurant for the taxable services provided and it shall include any amount shown separately in the breakup of gross amount such as service charges or service surcharge or special cover charges. However, following amounts shall be excluded from the gross value – a) amount paid the customer as ex gratia, generally called as tip meant for staff members. b) local taxes including entertainment tax. c) sales tax or VAT charged on food sale. d) sale value of goods sold at MRP. e) delivery charges (for home delivery service) Many restaurants charge event charges and special prices such as on Christmas eve, new year eve, various functions / programmes / food festivals or during live screening of matches etc. Such amounts shall also be liable to service tax.