03 July 2013
abatement means % on which one do not has to pay tax. in other words it is exemption. it is provided when a service includes some part of sale, as service tax is only on service portion therefore government has fixed the % in different such cases that what part of service will be considered as sale and on that part one do not require to pay service tax and that % on which tax is not to be paid is abatement, though on that part there could be other tax like vat etc. for eg in case of restaurant as per rule 2C of service tax valuation rules. 60% is abatement hence tax is payable on only 40% value of service provided. (reason of 60% abatement is sale of food included). but remember in current situation tax is only on those resturants those are serving liquor or has AC facility in there premise. abatement is 60% means 40% taxa only
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