Clarification on rate of service tax on restaurant service - Service Tax - Trade Notice - 03 / Miscellaneous / 2015 (Service Tax)

भारत सरकार केन्द्रीय उत्पाद शुल्क एवं सेवाकर आयुक्तकालय तृतीय तल , एनेक्सी भवन , केन्द्रीय राजस्व भवन , बीरचंद पटेल पथ , पटना | सं . संख्या: सेवाकर / व्या . सू ./ पैट /2015/641-702 Dated: 13-07-2015 व्यापार सूचना - 03 / विविध /2015( सेवाकर ) Subject: Clarification on rate of service tax on restaurant service - regarding The Service Tax rate has been increased to 14% with effect from 1st June, 2015. Certain doubts have been raised in regard to abatement On value of services provided in relation to serving of food or beverages by a restaurant, eating joint or a mess, having the facility of air- conditioning or central air-heating in any part of the establishment, at any time during the year. 2. Matter has been examined. Valuation of services provided in relation to serving of food or beverages by a restaurant, eating joint or a mess having the facility of air-conditioning or central air-heating in any part of the establishment, is determined as provided in rule 2C of the Service Tax (Determination of Value) Rules, 2006. In the said rule, service portion in an activity wherein goods, being food or any other article of human consumption or any drink (whether or not intoxicating) is supplied in any manner as a part of the activity, at a restaurant has been specified as 40 percentage of the total amount charged for such supply. In Budget, 2015, no change has been made in abatement and the rate of service tax on the abated value has been increased to 14% with effect from 1 st June, 2015. Therefore, effective service tax rate would be 5.6% (14% of 40%) of the total amount charged. Hence, with the increase in the applicable rate of service tax from 12.36% (including education cesses) to 14%, the effective rate on such establishments has increased from 4. 9% to 5.6% of the total amount charged. 3. It is further clarified that exemption from service tax still continues to services provided in relation to serving of food or beve ages by a restaurant, eating joint or a mess, other than those having the facility of air-conditioning or central air-heating in any part of the establishment, at any time during the year, अपर आयुक्त ( सेवाकर) केन्द्रीय उत्पाद शुल्क एवं सेवाकर मु0. पटना