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TMI BlogService Tax — Services rendered by mandap keepers and outdoor caterers — Applicability — ClarificatiX X X X Extracts X X X X X X X X Extracts X X X X ..... out their halls, rooms etc. for social, official or business functions?; (ii) whether service tax can be levied on food or any other article for human consumption, when supplied by a hotel, keeping in view that the State Governments also charges sales tax on food and drinks vide Clause 29(A)(f) of Article 366 of the Constitution (46th Amendment) Act, 1982?; (iii) whether mere supply of food or drinks (without any other accoutrements) by a restaurant or hotel will attract service tax (under the category of services rendered by outdoor caterers)?; (iv) whether service tax is attracted in cases where premises and/or connected facilities are let out on rent to clubs and cultural organisations for the purposes of holding programmes relat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is a certain exclusivity which has been afforded to the person to whom it has been let out. For instance, the activity of mere reservation of seats in a restaurant shall not attract service tax. 4. It is argued that supply of food is termed as a "deemed sale" which is charged to sales tax by the State Governments and as such it is not liable to service tax. In this context it may be clarified that deeming the supply of food in a restaurant as a sale does not in any way bar the levy of service tax on the service provided by outdoor caterers which is primarily a tax on service rendered by an outdoor caterer. It is pertinent to note that the service rendered by outdoor caterers is clearly distinguishable from the "indoor" services rendered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... firmative. The contention that holding a dance, drama or music programme it is not a social function is not tenable. Culture is an inalienable element of a civilised society and is an integral part of our social ethos and is infact a form of social intercourse. Programmes of dance, drama and music are social function. In case rental is being charged by the owner or caretaker of any premises for holding such functions, they are liable to pay service tax. Apparently, such renting out of premises is for a monetary consideration and thus has a pecuniary aspect. In case no charges/rental is being paid i.e. the premises are given out free of cost to hold such function, there would be no service tax liability. - Circular - Trade Notice - Public ..... X X X X Extracts X X X X X X X X Extracts X X X X
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