Service tax on restaurants

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Querist : Anonymous

Querist : Anonymous (Querist)

03 September 2014 In a restaurant AC hall is clearly demarcated but not separately named but food is sourced from a common kitchen, whether non ac turnover is included for service tax liability or not?
My question is AC hall demarcated from single restaurant which have both ac and non ac hall but not separately named and it does not have separate TIN No. whether for calculating service tax liability both ac and non-ac turnover includes or not?

Annu Agarwal

Annu Agarwal (Expert)
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03 September 2014 Had there been two seperate restaurants where food was served from a common kitchen service tax would have been applied to restaurant with AC Facility.

But you are discussing about a restaurant with two halls one AC and one Non-AC both within the restaurant.So as per my views service tax shall be levied on total turnover of both the halls.
Also circular No.Circular No.173/8/2013 – ST states that Services provided in relation to serving of food or beverages by a restaurant, eating joint or mess, having the facility of air conditioning or central air heating in any part of the establishment, at any time during the year (hereinafter referred as ‘specified restaurant’) attracts service tax.

Querist : Anonymous

Querist : Anonymous (Querist)

03 September 2014 I am asking doubt about a restaurant with ac and non ac halls but it has single TIN No.
Pls clear my doubt whether service tax liable for both ac and non ac total tunover?

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Annu Agarwal

Annu Agarwal (Expert)
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03 September 2014 Yes service tax shall be levied on on both ac and non ac turnover.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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03 September 2014 Service tax will not be levied on non ac turnover even the food is served from common kitchen.

Annu Agarwal

Annu Agarwal (Expert)
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03 September 2014 @Seetharaman Ji:As per the circular mentioned above service tax shall be levied even in the air conditioned facilityis in any part of the establishment i.e. the restaurant.So as per my view service tax shall be levied .

Please correct me if i am wrong .

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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04 September 2014 Please go through the following copied from the circular referred by you. Non ac part of restaurant will not attract service tax.

In a complex, if there is more than one restaurant, which are clearly demarcated and separately named but food is sourced from a common kitchen, only the service provided in the specified restaurant is 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. In such cases, service provided in the non air-conditioned / non-centrally air-heated restaurant will be treated as exempted service and credit entitlement will be as per the Cenvat Credit Rules.

Annu Agarwal

Annu Agarwal (Expert)
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04 September 2014 In the query ,the querist has clearly mentioned that the halls are not seperately named.

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CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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04 September 2014 I agree with the above reply.

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Querist : Anonymous

Querist : Anonymous (Querist)

04 September 2014 Please give the final conclusion. Whether non ac turn over includes to calculate Service tax or not?
Or else ac turnover only liable to pay service tax?

Querist : Anonymous

Querist : Anonymous (Querist)

04 September 2014 I am asking because the ac hall is demarcated but it is a single restaurant with ac and non ac halls food prepared from common kitchen. Thats why I have doubt Please clear my doubt and give a final conclusion.

Annu Agarwal

Annu Agarwal (Expert)
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04 September 2014 I am already given my opinion,that both the turnover shall be counted for service tax purpose.

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sushil kumar

sushil kumar (Expert)
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04 September 2014 agree with anu....
In case there is more than one restaurant which is clearly demarcated and separately named but food is served from common kitchen, then non ac part are not liable for service tax.
But in your case separate name has not been done, hence you are liable for service tax for non ac part also.

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Querist : Anonymous

Querist : Anonymous (Querist)

04 September 2014 thank you so much for clear my doubt

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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04 September 2014 If you name the ac hall separately in future you can avoid service tax on non ac hall.

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sushil kumar

sushil kumar (Expert)
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04 September 2014 Dear,
I am not talking about any hall, if in any establishment there is more than one restaurant which is clearly demarcated and separately named but food is served from common kitchen, so non ac restaurant will not be for service tax.