VAT to be charged by service apartments on sale of food

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CA Deepak Soni

Chartered Accountant

61 Points Posted on 06 July 2009

Dear members,

IF a Dealer Registered under the Luxury Tax Act for providing Service Apartments on Rent, is also selling Food items (Consumables) to the customers along with the apartments. then,

1) will he be liable to charge VAT on food items (Consumables) sold to customers, if Yes than will he be required to take seperate VAT TIN number or he can take reference of Luxury Tax number and charge his customers as per Luxury Tax rate.

2) If he is required to take a Seperate VAT TIN number then at what rates he should charge VAT.

Is there any Blanket rate of Tax for Combination of such service provided.

I hope my question is clear to all the members and any other suggestions regarding the query will be obliged

Replies (2)

RAJU

LEARNER

966 Points Posted on 06 July 2009

Hi Deepak,

1) Yes, sale of food is liable for VAT. Since Luxury Tax and VAT are two different enactments, registration under VAT Act needs to. be obtained separately.

2) VAT needs to be paid on sale of F & B at the applicable rate. Rate in the state of Karnataka is 12.5%. There can be a composition rate wherein tax can be paid at 4% if input tax credit is not availed (Review state provisions). However, there is no structure to pay blanket rate for combination of providing Luxuries and sale of goods.

sandeep

proprietor

40 Points Posted on 07 July 2009

yes sale of food is subject to vat. luxury tax is different levy however.rate is 12.5% and certain items like milk,curds,raw vegetables r exempt from this levy