Service tax in hotel industry.

While doing an audit in a hotel,i have come across the fact that they are dividing the rate per day into two plans, viz room and meal plan. Now on meal plan VAT is charged appropriately but service tax is also charged on meal plan. My question is whether it is right to charge service tax on meal plan?
Replies (1)

There is no service tax on sale of food. But if room rent is inclusive of meal like " complimentary break fast" , then service tax is applicable on gross charges.

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