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Service tax on a/c restaurants

P GUNAPALAN (PROPREITOR) (66 Points)

31 October 2013

I was informed that the basic limit for applicability of service tax on a/c restaurants has been fixed at 25 lakhs by a recent notification. Is it true and if it is can someone provide the notification no. and details?

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Manoj Agarwal (Service Tax Consultant Rourkela ServiceTaxExpert@yahoo.com) (3456 Points)
Replied 31 October 2013

Basic exemption limit is Rs. 10 Lacs, if the aggregate value of taxable service during the preceding FY does not exceed Rs. 10 Lacs. N/N-33/2012 dt. 20-6-12. However, as per valuation Rules, 2006, the value of service in case of AC restaurants is 40% of total bill value. So, effectively, if the total turnover is less than Rs. 25 Lacs, the value of service portion is less than Rs. 10 Lacs.

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