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Showing 1 to 20 of 565 Records Search Text: service tax air conditioned restaurants 2012 |
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Service Tax on air-conditioned restaurants A participant in a discussion forum inquired about the applicability of service tax on air-conditioned restaurants, specifically questioning whether selling packed foods like samosas and pastries in a self-operated multiplex falls under this tax category. The response clarified that service tax must be paid as the activity is not exempt under entry 19 of the relevant notification. It further explained that the business is covered under clause (i) of Section 66E of the Finance Act, 1994, which does not distinguish between self-prepared and externally sourced food items.
Taxation of Services - An Education Guide. The press release discusses the evolution of service taxation in India, starting from its inception in 1994 with a modest collection of Rs 407 crore, to Rs 97,444 crore in 2011-12. The document highlights the challenges faced due to overlaps in service categories and the lack of clarity in definitions, leading to tax leakages and litigation. The 2012 budget introduced a new taxation system known as the Negative List, where all services are taxable unless specified otherwise. This guide aims to educate taxpayers and administrators about the new system, providing guidance notes on various topics such as service definition, taxability, exemptions, and valuation.
Clarification regarding changes made or proposed in Budget 2012-2013 The circular outlines changes in the Indian Budget 2012-2013 regarding service tax, focusing on simplifying tax processes and preparing for the Goods and Services Tax (GST). The service tax rate is restored to 12%, and a "Negative List" approach is introduced, taxing all services except those specifically exempted. The Place of Provision of Services Rules, 2012, are introduced to determine the location of service provision for tax purposes. The circular also details changes in valuation rules, Cenvat credit rules, and exemptions, aiming to streamline compliance and reduce litigation. The new rules will replace existing export and import service taxation rules.
2022 (5) TMI 1359 - MADRAS HIGH COURT The court upheld the constitutionality of the impugned Act, dismissing challenges based on Articles 19(1)(a), 19(1)(f) and (g), 21, and 31. It found that the restrictions on advertisements and the powers conferred by the Act are reasonable, necessary for public health, and within legislative competence. The court emphasized the presumption of constitutionality in legislative enactments, particularly in economic and regulatory matters, affirming that the Act's provisions do not violate constitutional rights.
Indirect Tax and Food Industry The article examines the impact of indirect taxes, particularly central excise and service tax, on the food industry. It explains how agricultural produce undergoes various processes before consumption, with some activities classified as manufacturing, thus subject to excise duty. The article details the service tax implications for activities related to agriculture and food services, including restaurants and catering. It highlights that certain agricultural services are exempt from service tax under the negative list, while food manufacturing in restaurants is subject to both excise and service taxes. The article also discusses tax exemptions and the calculation of service tax in various scenarios within the food industry.
2023 (12) TMI 909 - CESTAT CHENNAI The Tribunal upheld the Order-in-Original, dismissing the Department's appeal and concluding that the Respondent's restaurants were not liable for Service Tax under 'Restaurant Services' for the disputed period. The Tribunal found that the restaurants did not meet the criteria of having a licence to serve alcoholic beverages, as clarified in Circular No. 139/8/2011-TRU. Consequently, they were eligible for exemption under Notification No. 25/2012-ST. The Tribunal emphasized that Department Circulars are binding on Revenue authorities, affirming the impugned order and dismissing the appeal.
2024 (6) TMI 625 - CESTAT CHENNAI The Tribunal allowed the appeal filed by the Appellant, determining that the demand for Service Tax was devoid of merits. The Tribunal set aside the impugned order and dismissed the Department's appeal, concluding that the Appellant's restaurant did not meet the criteria for Service Tax liability under "Restaurant Service" provisions.
2017 (12) TMI 1238 - DELHI HIGH COURT The court held that the second explanation to Section 2(m) of the DEBT Act did not result in a valid levy of entertainment tax as it lacked an amendment to the charging section. The retrospective operation of the amendment was deemed unconstitutional, and sponsorship payments were not considered "payment for admission." The state legislature was found to lack the competence to tax sponsorship amounts without amending the charging section. Due to the absence of a clear mechanism for tax collection on sponsorships, the levy failed. The court directed refunds of amounts collected from petitioners and rejected the argument of waiver by the revenue.
2023 (10) TMI 886 - CESTAT MUMBAI The Tribunal partially allowed the appeals, setting aside penalties under Sections 76, 77, and 78, while confirming the duty, liability, and interest for the normal period in ST/86675/2018 and ST/86106/2019. The appeal in ST/86671/2018 was fully allowed, removing the personal penalty on the CFO. The Tribunal found no intent to evade tax by the Appellant, dismissing charges of suppression of facts. The constitutional validity of imposing Service Tax on deemed sales was questioned, and the applicability of VAT and Service Tax was clarified as mutually exclusive. Consequential relief was ordered.
2023 (8) TMI 1049 - CESTAT NEW DELHI. The Tribunal upheld the demand for service tax for the period from 01.05.2011 to 31.03.2015, along with penalties under Sections 77(1)(a), 77(2), and 78 of the Finance Act, 1994. The appeal was dismissed as the appellant failed to prove the removal of air-conditioning facilities and was found to have intentions to evade tax liability, justifying the extended period of limitation and penalties.
2018 (11) TMI 1012 - AUTHORITY FOR ADVANCE RULING - MAHARASHTRA The catering services provided by the applicant under both B2B and B2C models are classified as canteen services under Entry No. 7(i) or (iv) of Notification No. 11/2017, depending on the presence of air-conditioning or central air-heating facilities. As per the amended Notification No. 46/2017, these services fall under Entry No. 7(i), attracting a 5% GST rate.
Recent Changes in Notifications, Circulars, Case laws- Analysis The article discusses recent changes in Indian service tax law during 2013-14, highlighting amendments through notifications, circulars, and case laws. It outlines the introduction of arrest powers for tax evasion exceeding INR 50 lakh, with specific conditions and procedures. Key notifications include exemptions for certain services and changes in definitions affecting tax liabilities. Circulars clarify tax applicability on activities like rice processing and services by Resident Welfare Associations. Important case laws address issues such as service tax on composite contracts, Cenvat credit utilization, and reimbursable expenses. The article emphasizes the need for assessees to stay updated to ensure compliance and avoid disputes.
2016 (8) TMI 502 - DELHI HIGH COURT The court upheld the constitutional validity of Section 65 (105) (zzzzv) of the Finance Act, declaring Parliament's competence to levy service tax on the service component of catering contracts. However, Section 65 (105) (zzzzw) was deemed unconstitutional as it encroached on the state's power to tax luxuries like short-term accommodation. The court also affirmed the legality of Section 66 E (i) regarding service portions in catering contracts and upheld the validity of Rule 2C, attributing a specific value to the service component.
Service tax implication on AC Restaurants vide the Finance Bill, 2013 The Finance Bill, 2013, introduced changes to service tax implications for air-conditioned (AC) restaurants. Effective from April 1, 2013, all AC restaurants, regardless of whether they serve alcohol, are subject to service tax. This amendment removed the previous exemption for restaurants with a liquor license. Consequently, consumers will face higher costs due to the inclusion of service tax on AC establishments, including fast-food chains. The law remains unclear on whether self-service, pick-up, or home delivery are taxable. Additionally, the issue of double taxation with VAT persists, and small-scale service providers may qualify for exemptions under certain conditions.
EXEMPTION TO RESTAURANT SERVICES The article discusses the exemption of service tax on restaurant services, specifically focusing on the conditions under which restaurants are subject to this tax. Initially, restaurants with air-conditioning or central air-heating and a license to serve alcohol were taxed. However, since April 1, 2013, only those with air-conditioning or central air-heating are taxed, regardless of alcohol licenses. Non-air-conditioned establishments remain exempt. The article also covers temporary exemptions in Uttarakhand and clarifications issued by CBEC regarding service tax applicability in various scenarios. Legal challenges in Kerala and Bombay High Courts regarding the constitutional validity of such taxes are also highlighted.
PRE-BUDGET MEMORANDUM 2013-2014 - FICCI The pre-budget memorandum for 2013-2014 by FICCI outlines key economic and fiscal recommendations aimed at addressing India's economic challenges. It emphasizes the need for stable tax policies to boost investor confidence and suggests implementing committee reports on tax reforms. FICCI opposes the introduction of inheritance tax, citing potential negative impacts on capital generation. The memorandum stresses the importance of dispute resolution mechanisms, efficient tax refund processes, and the removal of double taxation on overseas dividends. It advocates for maintaining current import duties to protect domestic industries until comprehensive GST implementation and highlights the need for infrastructure development, including the introduction of GST, to stimulate economic growth.
2025 (2) TMI 519 - CESTAT NEW DELHI The Appellate Tribunal dismissed the appeal by M/s Gurukripa Shahenshah Veg and Non-Veg Restaurant, upholding the Commissioner (Appeals) decision to impose service tax, interest, and penalties under the Finance Act, 1994. The Tribunal found that the appellant's restaurant service was subject to service tax due to the mandatory requirement of air conditioning for the Bar License. The appellant's inconsistent statements and lack of substantive evidence indicated an intent to evade tax. The Tribunal confirmed the extended period of limitation and penalties, aligning with previous rulings against the appellant.
2016 (11) TMI 545 - Supreme Court (LB) The SC held that taxes simpliciter do not infringe Part XIII of the Indian Constitution, and only discriminatory taxes are prohibited by Article 304(a). The compensatory tax theory lacks juristic basis and is rejected. Entry tax validity requires statute-specific examination under Articles 301 and 304. Clauses (a) and (b) of Article 304 are read disjunctively, and a levy violating Article 304(a) cannot be saved by Article 304(b) compliance. States can design fiscal legislation to ensure equal tax burdens on imported and locally produced goods. Discrimination under Article 304(a) refers to hostile protectionism, not mere differentiation.
2016 (11) TMI 1006 - KERALA HIGH COURT The court, following the precedent set by the Kerala HC, allowed the writ petition challenging the legality of levying service tax on air-conditioned restaurants serving food and beverages under the Finance Act, 2012. It declared the imposition of service tax illegal, granting the petitioner's declaration and ordering the refund of collected service tax to the concerned parties.
2021 (7) TMI 216 - CESTAT BANGALORE The Tribunal found that the Trusts' activities violated the principle of mutuality of interest as they were essentially mutual funds engaged in portfolio management with a profit motive. The Trusts were classified as providing asset management services under "banking and other financial services" and were liable to pay service tax on amounts retained as consideration. The Tribunal concluded that the Trusts' expenses, performance fees, and provisions for losses constituted consideration for services to contributors. The extended period for issuing the Show Cause Notice was deemed justified due to deliberate suppression of facts. Penalties under Sections 77 and 78 were upheld, while penalties under Section 76 were dropped. The matter was remanded for re-calculation of taxable services and other related matters.
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