Dear Sir
In most of the Hotels, they are charging Service Tax on Guest Laundry Service bills to their guest staying in hotel.
Laundry Cleaning may be by ‘Dry Cleaning’ or ‘Wet Cleaning’ method. If it is by Dry Cleaning, then only it is taxable under Dry Cleaning Service. The Wet Cleaning is not a specified activity under Sec.65(105)(zt). Further, the instruction/circular F.No.B.11/1/2002-TRU dated 01-08-2002 clarifies that the Wet Cleaning is not taxable to service tax and also specify the activities involved in dry cleaning.
Case reference:
In the absence of dry cleaning machine or record for raw material for dry cleaning process in premises, there would be no liability to service tax – held in Commissioner of Central Excise and Service Tax Vs. Band Box(2010)(17) STR 283 (Tri-Kolkata). In other words, merely bills issued as Dry Cleaning and having board of dry cleaners in the premises will not be liable under this category.
Hence, the ST is applicable on laundry charge only if it is for Dry Cleaning and only if the activity of dry cleaning are carried out / performed in the premise by the service provider.
In view of the above provisions, the the Service Tax on Dry Laundry Service by hotelier is not levieable as the hotelier is not carrying any Dry Cleaning Activity in his premises. They are getting it done by outside launder. Anyway Wet Cleaning is not covered as clarified by the department.
Now, the query is - Is this hoteliers charging ST which is not rwquired to be charged on the above service?
Is there any category which attract the ST on the above Service by hotelier to guest?
Regards
Nagappa B Nesur
CAclubindia
