Service tax on restaurants

ST applicable if AC facility is provided in any part....so even people opting non-AC sections will also suffer....

For calculating T/over and SSP exemp limit we have to see the restaurent as a whole...so total t/over of both the sections to be seen. 

Service tax will be applicable on only AC section and ssi exemption will be available upto 10 lakhs.

Hi Arun,

Can you please let me know is there any particular reference in which it is mentioned that service tax applicable only to AC sections? Because the case i am talking about is a restaurant in which AC section and Non-AC section is in same building attached to each other.

Regards,

Satya

Hi satya,

SSP limit will include the value of all taxable srvices provided by an assessee from one or more premises.The word used is taxable services,providing of non a/c resaturant services is not a taxable service.Hence only the value of services provided from A/c premises wud only be included.

Rgards,

sai.

Hi satya,

Sorry abt my earlier opinion. According to Budget 2013

Services provided in relation to serving of food or beverages or other article of human consumption (whether intoxicating or not) by a restaurant, eating joint or a mess, having:

 (i) The facility of air-conditioning or central air-heating in any part of the establishment, at any time during the year

     Supplied in Any Manner, as a part of the activity

sai.

Dear Sir,

As rightly pointed by Mr. Sai Krishna, and if we go by literal interpretation, then if you provide facility for AC in your restaurant for even a day during the financial year, then you will be liable for service tax on the billings of the entire restaurant!!! 

That may not be the intension of the legislature, but it seems to be the law untill some judicial pronouncement is done. In my view, the exemption notification is very loosly worded and is unclear and invites litigations. If any expert has different view, kinldy enlighten for the benefit of all, with reference to the case law or otherwise. 

Regards,

Manoj Agarwal

Please note that the Hon'ble High Court of Kerala has held on 03-07-2013 that the levy of service tax by the central government on supply of food & beverages is unconstitutional.