HOTEL SERVICE TAX RECENT

This query is : Resolved

CA Yash Marda (Querist)
Follow

29 April 2011 sir my query is with reference to the recent notification on hotels :

IF MY declared tariff = 1100
Festival discount to customer = 200 rs.
net amount received from customer = 900 rs.

1) will i be chargeable to service tax ?
2) service tax will be on 1100 (declared tariff not including discount) or on 900 (actual collection)

CA Parmeshwar Rathi

CA Parmeshwar Rathi (Expert)
Follow

29 April 2011 For the purpose of service tax, declared tariff (published rates) shall be considered and not the discounted or negotiated tariff. It would cover all charges payable for amenities such as air conditioner, furniture, refrigerator etc and any electronic gadgets installed in the room (eg, internet connection).

In your case, Service Tax is applicable on Rs 1100/-. the effective rate of Service tax is 5.15% (after 50% abatement), so service tax payable would be Rs 57/-(including Cess)