No Service Tax can be levied on take-away/parcel food from restaurants

Last updated: 21 February 2023

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The CESTAT has ruled that Service Tax cannot be levied on food items purchased for takeaway or parcel from restaurants. The tribunal determined that such transactions are essentially sales of goods, as they do not involve the provision of services like dining facilities or table clearing. Furthermore, the court clarified that allowing an associated company to use part of the premises for sales is considered expenditure sharing, not a taxable service.

Court :
CESTAT, New Delhi

Brief :
The CESTAT, New Delhi in Haldiram Marketing Pvt. Ltd. v. Commissioner, Central Goods and Service Tax [Service Tax Appeal No. 51555 of 2022 dated February 13, 2023] has set aside the demand order passed by the Revenue Department. Held that, no Service Tax can be levied on the activity of takeaway of food items as it would amount to sale of goods wherein, element of service such as dining facility, washing area and clearing of the tables are not involved. Further held that, permitting an associated enterprise to use a part of the premises for the sale of its product would not amount to sub-letting and would be considered as sharing of expenditure, which cannot be treated as service.

Citation :
Service Tax Appeal No. 51555 of 2022 dated February 13, 2023

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1 Year PLAN

1999

(Excl. of GST ₹359)

2 Years PLAN

3499

(Excl. of GST ₹629)

BEST VALUE

3 Years PLAN

4999

(Excl. of GST ₹899)

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Judgement posted by

Bimal Jain

Service

FCA, FCS LLB with21 Yrs of Experience inTaxation Indirect and Direct: Education Qualification: B.Com (Hons) Chartered Accountants Company Secretary LLB Qualified SAP FI/CO Consultants Professional Membership: Chairmanof Indirect Tax Committee of PHD Chamber of Commerce Member of Indirec ... Read more

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