16 April 2016
I want to know how a hotel can raise invoice to a customer when all the services are provided to say Corporate customer. e.g. A Corporate hires a hotel rooms for stay of its chief executive officers to whom food is also served in room as well as at restaurant run by hotel. Further conference is also held in conference room where Audio Visual Arrangement is also made by hotel along with food and drink. Hotel also charges extra amount as service charges. How all services can be covered in one bill. Hotel also pays luxury taxes and Sales/Vat tax. How invoice will be changed if hotel has opted for lumpsum payment of vat (as in Gujarat).
[For room services taxable portion is 60%, for food and drink in restaurant taxable portion is 40%, food and drink supplied in conference room taxable portion is 70%].
What would be the rate of service tax for conference room provided by hotel when no food is supplied in conference room.
Whether audio visual arrangement will be taxable at 100% value or it will be merged with conference room charges and benefit of 30% of value will be available.
17 April 2016
From your query it appears that Corporate Customer has entered into an agreement with a hotel / chain. Such agreements are common, since, with a guaranteed minimum off take there is a steep savings in the room tariff from 30% to 60% or more.
In such cases where the food and drinks are taken from room service and not the restaurants in the hotel - the services are known as bundled services and a flat rate of abatement of 30% is available and service tax is levied on 70%. Where the guest dines in the restaurant and signs the bill with his room number, the service tax is on 40% of the invoice.
Where conference halls are booked, the services offered are bundled services - food, beverages, other accessories, etc. all are taxed at 70% after an abatement of 30%.
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