Tax on Canteen Service, VAT + CST

[Pradeep Kaushik]

Dear Sir/s,

 

Our company, in Gurgaon (Haryana), is providing canteen services to all employees. We have a contract from outside agency, who provides all canteen service.

We are receiving the bill like below:

Total Meal                                               10000.00

Add: Service Tax @ 6.18%                       618.00          (50% Abetment on Total Meal Value)

Add: Vat @ 13.125% 0n 10618/-          1394.00

Total Bill Amount                                    12012.00 

 

Please suggest the tax liabilty on Canteen Service. Is our Vendor is making the Invoice according to Tax Obligation.

Best Regards.

Posts / Replies

[Pradeep Khatri]

According to the definition of the Sales Price under Section 2 (zg) of the HVAT Act, 2003 as amended time to time, the calculation seems to O.K.  Since VAT is applicable on the sales of goods, hence, Calculation of VAT on Service Tax amount doesnot seem correct.

This aspect can be got clarified from the VAT Department under Section 56 (3) of the HVAT Act or you may get it clarified from your counsel.