Facility service-st input food expenses

This query is : Resolved

Karthigeyan (Querist)
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15 November 2011 Great Day,

One of our vendor provide Facility Service like Man Power Service and provision of Food to employees those who are using company accommodation. our company provide place and utensils for preparation of food. They are purchasing all provisions and vegatables and provide food. They sent their invoice with Taxable Service, Service Tax and Cess. Let me know that whether it comes under definition of "Sale" and it comes under nature of Service and attracts Service Tax. And if it comes under service tax whether we can claim input credit against this invoice. Kindly clarify this issue

Hari Ganesh.V

Hari Ganesh.V (Expert)
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15 November 2011 Hi Karthikeyan,

Provision of food service will be under outdoor catering will is subject to an abatement of 50% on the condition that Cenvat credit cannot be claimed. On the other hand, facility management will be taxed at 10% under Maintenance or repair or cleaning service.

The wordings in the contract is very important. if you have scope and consideration separately identified for each work, then can take credit on facility management by maintaining separate books of accounts, fulfilling conditions of Cenvat credit rules, 2004.

it will be generally taxed as a service and service tax will be applicable..

correct me if i am wrong..

ACMA Obulirajan R

ACMA Obulirajan R (Expert)
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15 November 2011 If the company provides place for canteen and the serivce provided merely providing service then the same will come under "service Tax perview"
However, If the the canteen is owned by the service provider then service tax will not applicable.

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ACMA Obulirajan R

ACMA Obulirajan R (Expert)
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15 November 2011 Rule 2(l) - ―input service‖ (w.e.f 1.4.2011) means any service, - (i) Used by a provider of taxable service for providing an output service; or (ii) Used by a manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products upto the place of removal, and includes services used in relation to modernisation, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, security, business exhibition, legal services, inward transportation of inputs or capital goods and outward transportation upto the place of removal; But excludes services,- (A) Specified in sub-clauses (p), (zn), (zzl), (zzm), (zzq), (zzzh) and (zzzza) of clause (105) of section 65 of the Finance Act (hereinafter referred as specified services), in so far as they are used for- (a) Construction of a building or a civil structure or a part thereof; or (b) laying of foundation or making of structures for support of capital goods, except for the provision of one or more of the specified services; or (B) Specified in sub-clauses (d), (o), (zo) and (zzzzj) of clause (105) of section 65 of the Finance Act, in so far as they relate to a motor vehicle except when used for the provision of taxable services for which the credit on motor vehicle is available as capital goods; or (C) such as those provided in relation to "outdoor catering", beauty treatment, health services, cosmetic and plastic surgery, membership of a club, health and fitness centre, life insurance, health insurance and travel benefits extended to employees on vacation such as Leave or Home Travel Concession, when such services are used primarily for personal use or consumption of any employee;

Karthigeyan

Karthigeyan (Querist)
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15 November 2011 Thanks a lot.