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Service Tax - Clarification on Restaurant Service:

Written By Admin on Tuesday, 12 November 2013 | Tuesday, November 12, 2013

Shared by : Rajesh Mistry
Author : Genicon Legal Strings Team

Circular No.173/8/2013 dated 07th October 2013 - Clarification on Restaurant Service

Seria No.1 o th Notification
No. 25/2012
Service provide in   relatio 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 license to serve alcoholic beverages;

In a complex where air conditioned as well as non- air conditioned restaurants are operational but food is sourced from the common kitchen,   wil service   tax arise       in       the       non-air conditioned restaurant?

Now it is clarified that, in a complex, any part of the establishment having the facility of air conditioning or central air heating at any time during the year service tax will attract.

Service   ta will   be   exempted,   If   the following conditions are fulfilled:

If there is more than one restaurant, which are clearly demarcated and separately named but food is sourced from a common kitchen, in such a case service provided in a specified air conditioned restaurant will be liable to service tax and service provided in a non air-conditioned or non centrally air- heated  restaurant  will   not   be   liable   to service tax.

Whether     service     tax     is
leviable on goods sold on MRP      basis     across      the counter      as     part     of     the Bill/invoice.
If goods are sold on MRP basis (fixed under
the Legal Metrology Act) they have to be excluded    from     total     amount     for     the determination of value of service portion

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