Service tax rate on outdoor catering

Dear Friends,

1. As per Rule 2C of valuation rules, the taxable portion of outdoor catering service is 60%, where as as per Notification 26/2012, it is 70%. Which is the actual rate to apply?

2. This rate has to be applied on gross amount (including services) - is it right ?

3. As per the above, if 70%, the effective rate will be 8.652% (100*70%*12.36%) - am I right ?

4. If the assessee has the right to pay service tax on the whole amount (including material cost) and then to avain cenvat credit on input services ?

Please share your views as early as possible.

Thanks in advance...

vinodaca74 @ gmail.com

 Dear Vinod,

notification 24/2012 specifically speaks of Bundled Services which specifically includes Renting of the premises.

Thus if the purpose is only to have Catering service i.e the arrangement of Food, the valuation Rate is 60%, but in case the hotel is also renting the premise & quoting a Bundled rate for the Rent & fooding the valuation is 70%.

Dear Friends,

1. As per Rule 2C of valuation rules, the taxable portion of outdoor catering service is 60%, where as as per Notification 26/2012, it is 70%. Which is the actual rate to apply?

2. This rate has to be applied on gross amount (including services) - is it right ?

3. As per the above, if 70%, the effective rate will be 8.652% (100*70%*12.36%) - am I right ?

4. If the assessee has the right to pay service tax on the whole amount (including material cost) and then to avain cenvat credit on input services ?

Please share your views as early as possible.

Thanks in advance...

vinodaca74 @ gmail.com

 Dear Vinod,

notification 24/2012 specifically speaks of Bundled Services which specifically includes Renting of the premises.

Thus if the purpose is only to have Catering service i.e the arrangement of Food, the valuation Rate is 60%, but in case the hotel is also renting the premise & quoting a Bundled rate for the Rent & fooding the valuation is 70%.