9911796707
TMI BlogFood Serving in Train - Service TaxX X X X Extracts X X X X X X X X Extracts X X X X ..... Food Serving in Train - Service Tax X X X X Extracts X X X X X X X X Extracts X X X X ..... s during journey. Some trains charge charges for supply of food in the fare of train. A question rose whether such transactions would be liable to service tax or VAT. The question was settled by Delhi High Court in Indian Railways C. and T. Corpn Ltd v/s Govt of NCT of Delhi 2010 (7) TMI 174 - HIGH COURT OF DELHI It was contended by the learned counsel for the petitioner that the transaction betw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een the Petitioner Company and Indian Railways amounted to catering services which attract levy of service tax and, therefore, cannot be subjected to levy of VAT. In contrast it was contended that providing of food, snacks and water to the passengers on boarding the trains are altogether different from outdoor catering service. The following points were relied upon :- * The passengers travelling ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by train are served food and beverages as per a fixed menu approved by Railway Board. * Neither the petitioner nor the passenger has any choice in respect of articles served. * Neither the petitioner nor the passenger has any choice in respect of quantity each passenger gets. * It is not open to passengers to ask for a food article of his choice, since neither such a food article is availab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le in the train nor is the preparation or supply of food article as per choice of the passenger. * Fixed menu provides for supply fixed quantity. * The passenger has no role in respect of time and place at which meals/snacks are to be served. * The passenger gets no refund whether he likes or dislikes the meals offered to him. * The charges are charged by the railways with the ticket fare ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the passenger pays the same irrespective of whether he wants meals in the trains or not. * If the passenger does not take meal at the time it is offered to him, he does not get it at all Conclusively, there is no element of service at all except heating the cooked food and servicing the food and beverages. The service component in restaurant is much more. Thus such transactions are held to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be sale of goods and cannot be charged to service tax.
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CA Akash Phophalia
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