Dear sir,
My client have a hotel with 25 Rooms. 21 rooms are ordinary with tarrif below 1000/- and 4 rooms are a.c deluxe rooms with tarriff above 1200/-. Will the service tax be applicable on all the rooms or only a.c. deluxe rooms. Further will the exemption limit of Rs. 10 lacs be applicable on tarriff received from a.c. deluxe rooms or on all the rooms.
There is no specification given as you said above but the below mentioned words are mentioned in Budget'11:
Hotel accommodation in excess of ` 1,000 per day and service provided by air
conditioned restaurants that have license to serve liquor added as new services
for levying Service Tax.
First of all it is expected that the levy will face a challnege as something on which ST is not liable.
However for the common man this is a not an option.
It would be on room rental which are taxable i.e. over Rs.1000/-. That only wouldbe the taxable services and other services would notbe counted for the calcuation of 10 lakhs.
Saini Pati Shah & Co LLP, Chartered Accountants
Mumbai
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