How would the service tax and Swachh Bharat Cess (SBC) be calculated on restaurant services covered under Service Tax (Determination of Value) Rules, 2006.?

Circular No. FAQ-SBC - Dated: 16-11-2015 - SWACHH BHARAT CESS (SBC)-FREQUENTLY ASKED QUESTIONS (FAQ)

Q.17 How would the tax be calculated on restaurant services covered under Service Tax (Determination of Value) Rules, 2006.?

Ans. Swachh Bharat Cess would be calculated on the value arrived at in accordance with the Service Tax (Determination of Value) Rules, 2006. For example, the effective Swachh Bharat Cess in respect 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, would be 0.5% of 40% of the total amount, i.e, 0.2% of the total amount. The cumulative service tax and Swachh Bharat Cess liability would be [14% ST + 0.5% SBC] of 40% of the total amount, i.e., 5.8% of the total amount charged.

Dated: 16-12-2015