9911796707
TMI BlogService Portion in Supply of Foods & DrinksX X X X Extracts X X X X X X X X Extracts X X X X ..... Service Portion in Supply of Foods & Drinks X X X X Extracts X X X X X X X X Extracts X X X X ..... of India supply of any goods, being food or any other article of human consumption or any drink (whether or not intoxicating) in any manner as part of a service for cash, deferred payment or other valuable consideration is deemed to be a sale of such goods. Such a service therefore cannot be treated as service to the extent of the value of goods so supplied. The remaining portion however constitut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es a service. It is a well settled position of law, declared by the Supreme Court in BSNL's case [2006 (3) TMI 1 - SUPREME COURT], that such a contract involving service along with supply of such goods can be dissected into a contract of sale of goods and contract of provision of service. This declared list entry has been incorporated to capture this position of law in simple terms. It may be not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that definition of service in section 65B(44) now contains an exclusion in clause (1A) in relation to transfer, delivery or supply of goods which are deemed to be sale under clause 29A of Article 366 of the Constitution. Although services provided by any kind of restaurant are covered in this entry, the emphasis is to levy tax on services provided by only such restaurants where the service po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtion in the total supply is substantial and discernible. Thus the following category of restaurants are exempted - * Services provided in relation to serving of food or beverages 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, and which has a license to serve a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lcoholic beverage. * Below the threshold exemption The following activities are illustration of activities covered in this entry- * Supply of food or drinks in a restaurant; * Supply of foods and drinks by an outdoor caterer. The value of service in this case shall be determined as per Rule 2C of the Service Tax (Determination of Value) Rules, 2006. In terms of the said rule value of the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ervice portion shall be determined in the following manner- Value of service portion….. Shall be ….. percentage of the total amount charged: In a restaurant 40 By an outdoor caterer 60 'Total amount' referred to in the second column of the table above would be the sum total of gross amount and the value of all goods supplied free of cost for use in or in relation to the suppl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of food or any other article of human consumption or any drink, under the same contract or any other contract. So far as cenvat credit is concerned, in terms of the Explanation 2 to the valuation rules, any goods meant for human consumption classifiable under chapters 1 - 22 of Central Excise Tariff are not 'inputs' for provision of such service. Cenvat Credit is, therefore, not available on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ese items. Availability of Cenvat credit on other inputs, input services and capital goods would be subject to the provisions of the Cenvat Credit Rules, 2004 including the provisions relating to reversal of credits contained in rule 6. Abatement Vide Notification No. 13/2012-ST dated 17.03.2012, w.e.f. 1-7-2012, abatement @ 30 per cent is available from value of taxable service in respect of su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pply of food or any other article of human consumption or any drink, in a premises, including hotel, convention center, club, pandal, shamiana or any other place specially arranged for organizing a function provided that cenvat credit on any goods classifiable under Chapter 1 to 22 of Central Excise Tariff Act, 1985 used for providing taxable service has not been taken. Exemption from Service Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Following services are exempt from levy of Service Tax vide Notification No. 12/2012-ST dated 17.03.2012 -- (a) serving of food or beverages by a restaurant without bar license and without facility of air conditioning. (b) services provided to educational institutions by way of catering under a Government sponsored centrally assisted mid-day meal scheme. Position prior to Finance Act, 2012 (u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pto 30-6-2012)
These services were covered under Outdoor catering services u/s 65(105) (zzt) and Restaurant services u/s 65(105)(zzzzv).
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Reply By Dr. Sanjiv Agarwal as =
second last para under 'payment under reverse charge' tb treated as deleted. This has no relvance to this article. Inconvinience is regretted .
Sanjiv Agarwal
Dated: 7-8-2012 X X X X Extracts X X X X X X X X Extracts X X X X ..... wledge sharing by authors, experts, professionals ..... X X X X Extracts X X X X X X X X Extracts X X X X
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