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TMI BlogEXEMPTION TO RESTAURANT SERVICESX X X X Extracts X X X X X X X X Extracts X X X X ..... EXEMPTION TO RESTAURANT SERVICES - By: - Dr. Sanjiv Agarwal - Service Tax - Dated:- 10-7-2012 - - Services provided in relation to serving of food or beverages by a restaurant, eating joint or a mess, other than those having (i) the facility of air-conditioning or central air-heating in any part of the establishment, at any time during the year, and (ii) a licence to serve alcoholic beverages, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are exempt from levy of Service Tax. The term restaurant has not been defined in the Finance Act. Oxford English Dictionary defines restaurant as a place where people pay to sit and eat meals that are cooked and served on the premises. This word has a French origin restaurer which means provide food for . A restaurateur is a person who owns and manages a restaurant. According to Ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vanced Law Lexicon , P Ramanathan Aiyar, 2005 ed, Restaurant means premises in which is carried on principally or wholly the business of supplying meals or refreshments to the public or a class of the public for consumption on the premises but does not include a restaurant attached to a theatre. [Weekly Holidays Act (18 of 1942), S. 2(c)]. Restaurant means any premises, not being a resta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urant situated in a hotel referred to in clause (1) of Section 3, in which the business of sale of food or drink to the public is carried on and such premises, at the beginning of any month, are equipped with, or have access to, facilities for air conditioning. [Expenditure Tax Act (35 to 1987), S. 2(9A)]. It is not necessary that the facility of air-conditioning or central heating should be ava ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilable round the year. If the facility is available at any time during the financial year the conditions for the levy shall be met. Serving of food or beverages in a centrally air-conditioned or heated premise will be taxed if its restaurant has a license to serve alcoholic beverages. However, those restaurants which do not have license to serve alcoholic beverages will be exempt from service ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x. Serving of food or beverages outside the restaurant, say near the swimming pool, will be taxed if service is from a restaurant having license to serve alcoholic beverages. The levy is intended to be confined to the value of services contained in the composite contract and shall not cover either the meal portion in the composite contract or mere sale of food by way of pick-up or home delivery, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as also goods sold at MRP. However, tax will be levied on services provided by high-end restaurants that are air-conditioned and have licence to serve liquor. Such restaurants provide conditions and ambience in a manner that service provided may assume predominance over the food in many situations. Under Notification No. 26/ 2012-ST dated 20.6.2012, abatement @ 30 per cent is allowed w.e.f. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.7.2012 to bundled services by way of supply of food or any other article of human consumption or any drink in a premises, including a hotel, convention centre, club etc. subject to condition of non availment of Cenvat Credit. Also, Rule 2C of Service Tax (Determination of Value) Rules, 2006 , inserted vide Notification No. 24/2012-ST dated 6.6.2012 provides for determination of value of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taxable services involved in supply portion of an activity wherein goods, being of food and other drinks (whether intoxicating or not) in a restaurant or as outdoor catering and the value for the purpose of Service Tax shall be 40 per cent and 60 per cent respectively. = = = = = = = = = - - Scholarly articles for knowledge sharing authors experts professionals Tax Management India - taxmana ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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