Luxury tax

This query is : Resolved

SUBHASH MISHRA (Querist)
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19 March 2010 Respected sir,

One of my client (Partnership firm) is operating a marriage garden. On this place there are 6 rooms which he provides only for the purpose of marriage. In these rooms he doesn’t provide any kind of luxuries. Beside this he is not charging any separate rent or charges for those rooms.

In aggregate he charge only a lump sump amount towards the booking charges that is as like. For example –

Rs. 20,000/- For rent of marriage garden
Rs. 5,000/- Rent towards the utensils for cooking
Rs. 5,000/- Rent for Sofa, chairs, Tables etc. for open garden.
Rs. 1,000/- For cleaning charges (which we have to pay to local municipality)
Rs. 1,000/- Cleaning charges for the marriage garden.
Rs. 1,500/- Rent for generator (Which we have to pay generator owner and operator)
Electricity charges (As per consumption)

He charge tax @ 10% on rent of marriage garden only.

My Client is registered under the Hotel and Luxuries Tax Act of Rajasthan.

My query is that whether he is responsible to pay tax on all these amounts depicted above or he is doing right ?

Please guide.

(Subhash)

CA. B.SRINIVASULU

CA. B.SRINIVASULU (Expert)
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19 March 2010 Service tax is payable on all amounts and luxury tax is payable on rent for marriage garden since rooms are attached to it. For others he need not pay luxury tax if he bills with description as stated above. If he puts as lumpsum amount for all then both service tax and luxury tax he has to pay.