SERVICE TAX ON MANDAP KEEPERS

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Radhika

CA Practice

87 Points Joined March 2007

A Hotel is registered under following category of Service Tax Act

Mandap Keeper : Providing services as under :-

a. Providing air conditioned hall for conference, meetings,

lectures, seminars and exhibitions etc. Here we charge Hall

Rent or Venue charges.

b. Family functions like marriage parties , ring ceremony, birthday parties and other functions. Here charges are on per plate basis.

c. Organising events like New Year event and like where entry of any person is through entry tickets. This entry tickets some time includes food and liquors and some times only entry charges.

We are paying service Tax under above category of services as follows:

For (a) full service tax with Ed cess.

For (b) we take abatement @ 40% as prescribed under service tax.

I have following query:

1. for catering services (i.e.b) was exempted to Mandap keeper vide

Notification 12/2001- Service Tax Act. This exemption was available up

to june’2004 to this category. Were we liable to pay service tax during

exempted periods under different category of service for same service?

2. What is meaning of “substantial or satisfying meal” on following situations? :-

Charging rate by hotels are depend on menu ordered and the hours engaged the venue. Therefore breakfast rates are less in comparison to Lunch or Dinner. Is the breakfast not being a substantial meal under mandap keeper for claiming abatement?

3. In a games centre where snacks are provided on self service. A mini function is also organized. The rates given to function is clubbing of Menu displayed and individual charges of games. Is this function is under the net of Mandap keeper even if games centre has not been given for exclusively for such type of functions?

4 What is the tax liability for c (above).

5. Whether we can get abatement on other services apart from catering

services like LCD Projector, mike etc.

6 Higher Education Cess @ 1% was imposed by Finance Bill2007.What is the date of its applicability.

Replies (5)

shyam kishor porwal

Chartered Accountant

183 Points Joined November 2007

Answer of your queary will be as follows: 1. No not liable to pay service tax. 2. Break fast is also covered under “substantial or satisfying meal”. Take the benefit of abatement. 3. game centre is not covered under mandap keeper service. 4. Its covered under convention service. 5. No you can't take abatemnt. 6. HEC is applicable from 12-05-2007

Ritesh

CA Final

326 Points Joined August 2007

Answers are as : 1) Not liable to Service Tax 2) Breakfast also covered under "substantial orsatisfying meal'.Hence you can avail benefit. 3)Game center will be covered under Mandapkeeper Service, if it has been let out for consideration for organising any social, business or official function. 4) It wont come under Convention Services since it has been made open to public.Not so sure whether it will fall under 'Mandapkeeper' or not. 5)40% abatement you will get on total bill charged, (if it is inclusive of Catering charges), not just on catering Charges.Hence if you have charged for LCD Projector etc. in the bill & it is inclusive of Catering charges also, then you will get abatement on Total bill amt. However, you can take benefit of Notification No. 12/2003, which states that value of Taxable Service will be exempt to the value of Food supplied subject to few conditions. You can take whichever is beneficial to you. 6) HEC applicable from 11.05.2007

Mukesh

Self employed

71 Points Joined November 2007

1) it would be liable to service tax because it is commercial purpose. 2) b fast is not substantial or satisfying meal 3) if game center for business purpose, then it would liable to service tax 4) convention centre is expressly defined under service tax as separate category. 5) it would be advisable to split the bill for catering as well as equipment hiring. 6) as already mentioned that by earlier i.e. 11.05.07

Radhika

CA Practice

87 Points Joined March 2007

1.I have gone through and find that banquet parties in hotel is chargeable to Service Tax under Conventional Services if do not have amusement, recreation and entertainment. So all coferances, lectures, AGM, Product display , exebition, roadshow etc formal parties are covered under Conventional Services.
2. This points is still confusing.
3. In game centre if any exclusive party is held then it is chageable to tax.
4. Entry through ticket to general public is not chargeable to tax
5. Abatement is available in this item also also.
6. HEC is effective from the date of enactment of Finance Bill2007. i.e. 01.03.07

shyam kishor porwal

Chartered Accountant

183 Points Joined November 2007

Break fast is also under providing food. Hence we can take abatement.

HEC is applicable from the date decleared by government in official gaggate and govt. decleared as on 11-05-07. hence it will be appliacble from 11/12-05-2007.

Abatement is allowed only if invoice is inclusive of catering service.