Service tax on food bill

Hi,

 

 

See below example and then answer my queries....

 

 

Suppose,

 

 

Food & Beverages = Rs. A

 

Service Charges = Rs. B

 

Service Tax = ??

 

 

Q.1.) Is Service Tax applicable at all?

 

Q.2.) Should the Service Tax be levied on (A+B) OR (A) OR (B)????

 

Q.3.) Also, can a person deny to pay Service Charges to a restaurant?

 

Please advice!

 

//peace

/Saurabh..V

Hi. Can someone please respond? This is very serious question of law and thousands of people are being fooled into paying extra amount in the name of Service Tax......

 

 

//peace

/Saurabh..V

Hello. Pls reply....is there no taxation lawyer who know this much on the site??

Sir,

Plz explain your opinion in this regard. How to calculate service tax step by step.

I'm still awaiting response on this. Pls advice...

As per Service Tax Act, 1994 Service on Restaurant

It is clear that any premises which sold out any softdrink or any food beverage whether alcoholic or not, if charged any amount from the customer it is liable to pay tax, hence he is taken service tax of its fooding items.

Previous contention of the deptt. is that if any restaurant installing A.C. for cooling facility to its customer than cover under service tax act, but now in budget, 2013 make amendement by the Finance Min. and now any restuarant like any covered building in which food supply or supply any softdrink activity are angaged, so now it should be covered in service tax act,

But first 10 Lacks it should be exempt from service tax but after that it covered under the act and every amount after 10 Lack charged service tax.

Now service tax levied on food item beverage or service charged or both

Service tax relating to any restuarant activity should be levied on food or beverage activities not on servicing activity and when the bills are combined with cost of food & service charge so make seperate food cost & gettting abatement of 60% of the such value & make service tax laibility is on 40%

 

For Exm.

Food Cost 5000; Service charged 100; Total bill cost 5100

Now Seperate cost of food is 5000 which eligible for service tax

now abatement 60% i.e. 5000*60%=3000 exempty

and 5000*40%= 2000 liable for service tax i.e 12.36% of 2000= 247.20

But if restuarant billing not contain sale of food upto Rs. 10 Lack so service tax is not levied and for knowing this amount. Let see sales tax return in which you find sale amount of resturant facility, if it exceeds from 10 Lack so whole amount will be charged under service tax.

For more information giving the mail on i.d. cacssharma@yahoo.com

Sir

1. No service tax for all.

2. Service tax will be levied on B only.

3.  Nobody deny for service tax payment.

Pls refer circular No.173/8/2013 - ST

Sir

1. No service tax for all.

2. Service tax will be levied on B only.

3.  Nobody shall deny for making service tax payment legally.

Pls refer circular No.173/8/2013 - ST

Hi, As per explanations above: -Service tax is applicable even on food items if the restaurant sales are above Rs.10Lac? - We can negotiate and even deny Service Charge but have to pay ST as required by law. - And finally, ST is applicable om only 40% of the total amount which is taxable as per the law. Am I right? //peace /Saurabh.V

Hi

once the service provider collects ST, he is liable to pay it to the Government, even if his turnover is below to the exemption limit of first 10 lacs.  40% is applicable when there is no chance for separation of goods and services on the turnover amount.  This is will not apply to your query.

Hi

once the service provider collects ST, he is liable to pay it to the Government, even if his turnover is below to the exemption limit of first 10 lacs.  40% is applicable when there is no chance for separation of goods and services on the turnover amount.  This will not apply to your query.

Hello sir,

First of all you know that service provider laible to pay service tax in case of resturant bcz of mostly customer are unregistered they are loacal individuals mostly, hence this laibility to pay is based on service provider and second think is that if resturant said that they do not recover any service tax from its customer than deptt. contention is that resturant recover amount is including service tax and that service tax laibility to pay which including in sales amount, and if you denied to this you made sales as per service tax law and smartly used sales below 10 Lacks For Exm. If Sales whole of the year is 1200000/- and if you say that resturant to not recd. any service tax from customer then service tax levied service tax of gross basis i.e. (1200000*40%)*12.36/112.36 ......... this is service tax which recovered by department. If upto date resturant sales does not upto 10 Lacks so no any service tax laibility is beared by restaurant but it is also know that your sales data also getting by the service tax deptt. from sales tax without your permission it is supremecy power of s.t. deptt. So if we cross limit so its better to deal with s.t. deptt.