Service tax for hotels
Vishnu
(Querist) 23 July 2012
This query is : Resolved
Hi
One of my client has recently started hotel business which is of 3star.
I have confusion about the following points,please clarify in this regard to the point wise and also if any gazetted not please send me ..
1)Wht is the service tax to be collected by him from customers for a) Accommodation and b)food service or restaurant
2)At what rate service tax is to be paid by the hotel owner to the service tax department on accommodation and food.
3)What are the abatement available ad their respective rates for accommodation,food/ restaurant and if any other.
4)When is due date for payment of service tax i.e is it monthly or quarterly and
returns half yearly or any change
If any files please send to
vishnuv1@gmail.com
Tajobsindia
(Expert) 23 July 2012
For your que. 1 & 2 below are replies;
As per the CBEC'S Circular NO. 139/8/2011-TRU, DATED 10-5-2011 there are two two new services relating to services provided by specified resturnats and by way of short-term hotel accommodation came into force with effect from 1st May 2011, a number of queries have been raised by the potential tax payers and are addressed as follows:
A. For Short Term Accommodation Service:-
1. “Declared tariff” includes charges for all amenities provided in the unit of accommodation like furniture, air-conditioner, refrigerators etc., but does not include any discount offered on the published charges for such unit. The relevance of ‘declared tariff’ is in determining the liability to pay service tax as far as short term accommodation is concerned. However, the actual tax will be liable to be paid on the amount charged i.e. declared tariff minus any discount offered. Thus if the declared tariff is Rs 1100/-, but actual room rent charged is Rs 800/-, tax will be required to be paid @ 5% on Rs 800/-.
2. It is possible to levy separate tariff for the same accommodation in respect of a class of customers which can be recognized as a distinct class on an intelligible criterion. However, it is not applicable for a single or few corporate entities.
3. Where the declared tariff includes the cost of food or beverages, Service Tax will be charged on the total value of declared tariff. But where the bill is separately raised for food or beverages, and the amount is charged in the bill, such amount is not considered as part of declared tariff.
4. When the declared tariff is revised as per the tourist season, the liability to pay Service Tax shall be only on the declared tariff for the accommodation where the published/printed tariff is above Rupees 1000/-. However, the revision in tariff should be made uniformly applicable to all customers and declared when such change takes place.
5. For the purpose of service tax luxury tax has to be excluded from the taxable value.
B. For Services Provided by Restaurants:-
1. Service Tax is leviable on the service provide by a restaurant which satisfies two conditions: (i) it should have the facility of air conditioning in any part of the establishment and (ii) it should have license to serve alcoholic beverages. Within the same entity, if there are more than one restaurant, which are clearly demarcated and separately named, the ones which satisfy both the criteria is only liable to service tax.
2. The taxable services provided by a restaurant in other parts of the hotel e.g. swimming pool, or an open area attached to the restaurant are also liable to Service Tax as these areas become extensions of the restaurant.
3. When the food is served in the room, service tax cannot be charged under the restaurant service as the service is not provided in the premises of the air-conditioned restaurant with a licence to serve liquor. Also, the same cannot be charged under the Short Term Accommodation head if the bill for the food will be raised separately and it does not form part of the declared tariff.
4. For the purpose of service tax, State Value Added Tax (VAT) has to be excluded from the taxable value.
For your que. 3 send by PM your email ID I will send you recent changes in ST effective from 01/07/2012 PDF file.
A. Hotels -Room Rent (Having tariff of Rs. 1000/- and above)
Applicable from 01st. April 2012
Present abatement 50% / Servcie Tax @ 12.36% makes it 6.18%
After the passing of the Union Budget 2012 - 13
The abetement is 40% / Servcie Tax @ 12.36% makes it 7.416%
B. A/C resturants having license ot serve liquor
Applicable from 01st. April 2012
Present abatement 70% / Servcie Tax @ 12.36% makes it 3.708%
After the passing of the Union Budget 2012 - 13
The abetement is 60% / Servcie Tax @ 12.36% makes it 4.944%
C. For Mandap keeprs
Applicable from 01st. April 2012
Present abatement 40% / Servcie Tax @ 12.36% makes it 7.416%
After the passing of the Union Budget 2012 - 13
The abetement is 30% / Servcie Tax @ 12.36% makes it 8.65%
For your last question the filing are done every quarter on 5th. July, 5th. Oct., 5th. Jan. and 5th. Mar. respectively and returns are filed every half yearly basis on 25th. oct. and 25th. April respectively.
