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TMI BlogCanteen Service - Service Tax Exempted From 22-10-13X X X X Extracts X X X X X X X X Extracts X X X X ..... CBEC exempts Services provided in relation to serving of food in canteen maintained by a Factory The Central Government vides Notification No. 14/2013-ST dated October 22, 2013 ( the Notification ) has amended the Notification No. 25/2012 dated June 20, 2012 ( the Mega Exemption Notification ). The Notification adds Entry No. 19A in the Mega Exemption Notification which provides as under: Services provided in relation to serving of food or beverages by a canteen maintained in a factory covered under the Factories Act, 1948 (63 of 1948), having the facility of air-conditioning or central air- heating at any time during the year In accordance with the above, services provided in relation to servin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g of food or beverages by a canteen having the facility of air-conditioning or central air-heating at any time during the year maintained in a factory covered under the Factories Act, 1948 will be exempt from levy of service tax. My Question : As per Above ammended Notification - Service Tax exemted for Service Provided for out side canteen service provided in factory for employees ( Supply food Services ) . Please guide . with Regards, SNEHAL SHAH - Reply By Brijesh Verma - The Reply = Factories which are covered under Factories Act and have canteen facility (whether Air conditioned or not) are now exempted. - Reply By Brijesh Verma - The Reply = TO further clarify, earlier, only such restaurants, eating joints and me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss were covered under tax which had air conditioning or central heating. within this ambit even canteens (if air conditioned) within factory premises were covered. This present exemption applies to these. There would be no difference if outside agency is involved or it is in house. - Reply By SNEHAL SHAH - The Reply = R/sir, But Canteen run outside Service provider not company run the canteen . Service proder issue bill and company pay the bill amount . In this case Service tax exemted from service provider ? Please guide sir , SNEHAL SHAH - Reply By Brijesh Verma - The Reply = YES DEFINITELY IT WOULD BE EXEMPT. THE EXEMPTION IS FOR ANY CANTEEN RUN IN A FACTORY. THE EXEMPTION NO WHERE TALKS ABOUT THE OWNERSHIP. - Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ply By Chandrashekhar Kate - The Reply = The wording of the notification is "canteen maintained in a factory covered under the Factories Act, 1948 (63 of 1948)". It means only those canteen which are to be mandatory to Employer to maintain under Factory Act. This mandatory condition is applicable only those factories having more 250 employee as per Factory Act. If factory having less the 250 employee and maintaing canteen for their employee is not covered under this notification. Such canteen are maintained by employer not as per provision of Factory Act but as per employment terms/Agreement agreed by the employer with factory Staff/worker. Therefore, please check whether canteen is maintained as per factory act or not? My view - The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mandatory (as per factory Act) canteen is maintained by factory canteen staff or outside contractor is exempt from levy of service tax. C.N. Kate - Reply By SNEHAL SHAH - The Reply = Many thanks sir for 100 percent Clarity about this notificaiton . With Regards, SNEHAL SHAH - Reply By Ashok Jogalekar - The Reply = I have some doubt which needs clarification: 1) Now specific exemption for canteen having Air-conditioning / central air heating has been given, does this mean that factory canteen not having Air-conditioning / central air heating was exempted so far ? 2) So what happens to the canteens not having Air-conditining / central air heating, were they exempted? This is because the service providers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are charging service tax and the CENVAT after 01.04.2012 is being denied because it is for personal consumption. - Reply By CA.S Ganesh - The Reply = Dear friends, According to my view, the service tax is exempted for those who serving food to employees. Here, the person should be a factory. if outsider provides food, then it is covered under catering service, hence not exempted. provider should be a factory. like many manufacturing cos.preparing food on own are exempted - Reply By Ashok Jogalekar - The Reply = Do you mean that Canteen services provided by a outside contractor to the employees in a factory is taxable ? - Reply By sridharan srinivasan - The Reply = Yes, going by the definition, it would come under the pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view of service tax, being provided by an outside canteen service provider. However, if the canteen service provider, serves from within the premises of a factory, service tax would not be applicable, as per the amended definition And it should be a mandated canteen facility as per the Factories Act, going by the literal meaning of the notification which refers to (63 of 1948)". S.Sridharan - Reply By Ashok Jogalekar - The Reply = Do you mean if food is cooked inside the factory and served inside factory, then, service tax will not be applicable? where as if it is cooked outside and brought and services in factory, then, service tax will be applicable? Whereas the recent notification exempts without any rider does not differ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entiate served from outside or within: Services provided in relation to serving of food or beverages by a canteen maintained in a factory covered under the Factories Act, 1948 (63 of 1948), having the facility of air-conditioning or central air- heating at any time during the year - Reply By sridharan srinivasan - The Reply = Hi, Mr. Ashok Joglekar I would like to clarify as below To be exempt, the canteen should be mandated as per the factories act And the same may be maintained by the Co or outsourced to the canteen service provider If the canteen is not a mandated one, then such an exemption cannot be drawn from the reading of the notification Hope it clarifies S.Sridharan - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Reply By Ashok Jogalekar - The Reply = Do you mean if food is cooked inside the factory and served inside the factory covered under Factories act by the service provider then it is exempted? and it is taxable if cooked outside and served in factory canteen covered under factories act? - Reply By sridharan srinivasan - The Reply = Hi, The point would like to emphasize is Is the canteen mandated under the factories act If so, service tax is exempt otherwise not Ignore whether the canteen is run by factory itself or by an outside service provider thanks - Reply By Ashok Jogalekar - The Reply = Still my original doubts remain unanswered: I have some doubt which needs clarification: 1) Now specific exemption for c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anteen having Air-conditioning / central air heating has been given, does this mean that factory canteen not having Air-conditioning / central air heating was exempted so far ? 2) So what happens to the canteens not having Air-conditining / central air heating, were they exempted? This is because the service providers are charging service tax and the CENVAT after 01.04.2012 is being denied because it is for personal consumption. - Reply By SNEHAL SHAH - The Reply = R/all , Yes as per Mr. sridharan srinivasan say is 100 percent correct as per my opinion . With Regards, SNEHAL SHAH - Reply By Ashok Jogalekar - The Reply = I read an article which says only the employers providing Canteen services to their employees in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... factory having Air-conditioning / central air heating is covered under factory Act is exempted and it does not cover the outside service provider providing services to the employers. It is to be noted that S.No. 19 or 19 A of Notification No. 25/2012 , cover only the services provided in relation to serving of food or beverages by a restaurant / by a canteen to the customers. The services provided by the contractors to the employers cannot be covered under these entries. In case of the canteens run by the employers, these are canteens / eating joint / mess / restaurant in the hands of the employers and they provide service to the employees. So the benefit of exemptions under S.Nos. 19 19 A ibid can be claimed by such canteens / eat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing joint / mess / restaurant, i.e the employers. When the contractors provide service to the employers, the contractor is distinct from the canteens / eating joint / mess / restaurant and they provide service to these canteens / eating joint / mess / restaurant, run by the employers. Hence, the contractors would continue to be liable to pay service tax. Services provided by the Contractors to the employers in connection with cooking, serving, etc. Prior to 30.06.2012 Liable to service tax under outdoor catering service. Abatement 50 percent under Notification 1/2006 ST Dt. 01.03.2006. From 01.07.2012 to till date Liable to service tax. Value of service 60 percent of total amount as per Rule 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C of Service Tax (Determination of Value) Rules, 2006. - Reply By CA.S Ganesh - The Reply = I agreed the answer given by Mr.chandrasekara kate. - Canteen Service - Service Tax Exempted From 22-10-13 - Query Started By: - SNEHAL SHAH Dated:- 26-10-2013 Service Tax - Got 18 Replies - Service Tax - Discussion Forum - Knowledge Sharing, reply post by an expert, personal opinion Tax Management India - taxmanagementindia - 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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