Service tax on sale by restaurant

VAT is definitely payable as it is a Deemed Sale transaction as per Article 366(29A)(f) of the constitution.

The logic behind service tax on restaurant is that there us an embedded se4vice element as thry serve the food privude eating space Tax on restaurant service is still subjudice in your case if they are providing packed foods for not eating at restaurant you can only pay vat and show the amount as sale though department may take different view