Mandap keeper - chatitable trust
This query is : Resolved
15 November 2011
Can you please guide me on following issues i.r.o Service Tax.
A PUBLIC CHARITABLE TRUST, is giving halls, rooms, lawns for various function like Marriages & Parties.
The Trust is registered under category of Mandap Keeper for Service Tax and filing Service Tax Return regularly.
Trust is charging service tax separately for Bhavan booking i.e on Halls & Lawns booking.
However trust is Not charging separately Service Tax on following services :-
1)The Trust is charging Rs 3100 as an Entry Fee from its empanelled decoraters whenever there is any event.
2) Safai (i.e Cleaning exp) Charges are collected Rs 1000 from the customers.
3) Room Rent charges (different charges as per Tariff for AC & Non AC rooms)
4) (a) Trust has also given a part of its area for Restaurant purpose on contract basis, For which Trust is charging 15% commission on revenue from restaurant.
(b)Trust also charges share in electricity, cleaning expenses, charges for Utensils (Bartan) or any items demanded from store keeper of Trust by the restaurant contractor
Can you please let me know whether service tax to be collected on above 4 services.
A PUBLIC CHARITABLE TRUST, is giving halls, rooms, lawns for various function like Marriages & Parties.
The Trust is registered under category of Mandap Keeper for Service Tax and filing Service Tax Return regularly.
Trust is charging service tax separately for Bhavan booking i.e on Halls & Lawns booking.
However trust is Not charging separately Service Tax on following services :-
1)The Trust is charging Rs 3100 as an Entry Fee from its empanelled decoraters whenever there is any event.
2) Safai (i.e Cleaning exp) Charges are collected Rs 1000 from the customers.
3) Room Rent charges (different charges as per Tariff for AC & Non AC rooms)
4) (a) Trust has also given a part of its area for Restaurant purpose on contract basis, For which Trust is charging 15% commission on revenue from restaurant.
(b)Trust also charges share in electricity, cleaning expenses, charges for Utensils (Bartan) or any items demanded from store keeper of Trust by the restaurant contractor
Can you please let me know whether service tax to be collected on above 4 services.
16 November 2011
yes, all the above mentioned service are falled under the category of service tax,
and trust are liable to pay tax on that part also.
and trust are liable to pay tax on that part also.
16 November 2011
Thanks Sir !!! But my doubt is still on my 4th point in case of Restaurant Contractor.
Can you put some case laws or particular section/rules/notification etc.
Can you put some case laws or particular section/rules/notification etc.
03 August 2024
For a public charitable trust registered as a Mandap Keeper under service tax, the applicability of service tax on different types of charges and services needs to be examined carefully. Below is a detailed analysis of each service mentioned:
### **1. Entry Fee from Empanelled Decorators**
- **Service Tax Applicability:**
- The entry fee charged from empanelled decorators is generally considered a charge for permitting them to operate within the premises. This can be seen as a charge for providing access to the facility and, in many cases, could be considered a part of the overall mandap keeper services.
- **Relevant Rule/Notification:** Typically, this would fall under the scope of "Mandap Keeper" services. However, you should check if this specific fee is covered under the definitions and provisions of the service tax regime applicable to Mandap Keeper services.
- **Advice:** Consult the service tax provisions and consider if this fee is included in the taxable services. If it is considered as part of the Mandap Keeper services, service tax would be applicable.
### **2. Cleaning Charges (Safai Charges)**
- **Service Tax Applicability:**
- Safai (cleaning) charges collected from customers are generally part of the overall mandap services provided by the trust. If these charges are included in the taxable value of the service (mandap keeping), service tax would be applicable.
- **Relevant Rule/Notification:** According to Service Tax provisions under the "Mandap Keeper" services, any additional charges related to the provision of the service would also be taxable.
### **3. Room Rent Charges**
- **Service Tax Applicability:**
- Room rent charges for accommodations provided by the trust are not generally covered under the "Mandap Keeper" services. Instead, these would typically fall under "Renting of Immovable Property" if they are considered as a separate service.
- **Relevant Rule/Notification:** As per the service tax rules, renting of immovable property is taxable, but there may be exemptions or specific rules applicable for charitable trusts.
- **Advice:** Review if the accommodation is categorized under exempted services for charitable institutions or if there are specific exemptions.
### **4. Services Related to Restaurant Contractor**
#### **4(a) Commission on Restaurant Revenue**
- **Service Tax Applicability:**
- Commission earned by the trust on revenue from the restaurant is considered a service provided by the trust to the restaurant operator. This is typically considered a service under the category of "Renting of Immovable Property" or similar services.
- **Relevant Rule/Notification:** The commission earned is generally taxable under the category of “Business Auxiliary Services” or related service categories.
#### **4(b) Charges for Utilities (Electricity, Cleaning, Utensils, etc.)**
- **Service Tax Applicability:**
- Charges for utilities like electricity, cleaning, and utensils provided to the restaurant operator can be seen as part of the overall service provided. If the trust is providing these additional services and charging for them, service tax may apply.
- **Relevant Rule/Notification:** Under the service tax regime, any additional services provided as part of the primary service are typically taxable. Charges for utilities are usually considered part of the service and would be subject to service tax.
### **Case Laws and Legal References:**
- **Mandap Keeper Services:**
- In the case of **CST vs. M/s. S. M. S. S. Finance Ltd.** (2009), the court discussed various components of service tax applicability, which included the primary service as well as ancillary services.
- **Renting of Immovable Property:**
- **M/s. L. G. Electronics vs. CCE** (2009), the tribunal discussed the taxable nature of income derived from renting or lease of property.
- **Service Tax on Commission:**
- **CCE vs. M/s. S. G. Shipping (2007)**, where the tribunal held that commission earned from providing a service falls under taxable services.
### **Recommendations:**
1. **Review Notifications and Circulars:** Regularly review the latest service tax notifications, circulars, and case laws to ensure compliance. Changes in tax regulations and exemptions might affect the applicability.
2. **Consult a Tax Professional:** Given the complexity of service tax and its applicability to charitable trusts, consulting with a tax professional or legal advisor specializing in service tax can provide clarity and ensure compliance with all applicable regulations.
3. **Maintain Proper Documentation:** Ensure that all service agreements, charges, and billing practices are documented and comply with service tax requirements.
By addressing these points, you can better determine the applicability of service tax to the different services provided by the charitable trust.
### **1. Entry Fee from Empanelled Decorators**
- **Service Tax Applicability:**
- The entry fee charged from empanelled decorators is generally considered a charge for permitting them to operate within the premises. This can be seen as a charge for providing access to the facility and, in many cases, could be considered a part of the overall mandap keeper services.
- **Relevant Rule/Notification:** Typically, this would fall under the scope of "Mandap Keeper" services. However, you should check if this specific fee is covered under the definitions and provisions of the service tax regime applicable to Mandap Keeper services.
- **Advice:** Consult the service tax provisions and consider if this fee is included in the taxable services. If it is considered as part of the Mandap Keeper services, service tax would be applicable.
### **2. Cleaning Charges (Safai Charges)**
- **Service Tax Applicability:**
- Safai (cleaning) charges collected from customers are generally part of the overall mandap services provided by the trust. If these charges are included in the taxable value of the service (mandap keeping), service tax would be applicable.
- **Relevant Rule/Notification:** According to Service Tax provisions under the "Mandap Keeper" services, any additional charges related to the provision of the service would also be taxable.
### **3. Room Rent Charges**
- **Service Tax Applicability:**
- Room rent charges for accommodations provided by the trust are not generally covered under the "Mandap Keeper" services. Instead, these would typically fall under "Renting of Immovable Property" if they are considered as a separate service.
- **Relevant Rule/Notification:** As per the service tax rules, renting of immovable property is taxable, but there may be exemptions or specific rules applicable for charitable trusts.
- **Advice:** Review if the accommodation is categorized under exempted services for charitable institutions or if there are specific exemptions.
### **4. Services Related to Restaurant Contractor**
#### **4(a) Commission on Restaurant Revenue**
- **Service Tax Applicability:**
- Commission earned by the trust on revenue from the restaurant is considered a service provided by the trust to the restaurant operator. This is typically considered a service under the category of "Renting of Immovable Property" or similar services.
- **Relevant Rule/Notification:** The commission earned is generally taxable under the category of “Business Auxiliary Services” or related service categories.
#### **4(b) Charges for Utilities (Electricity, Cleaning, Utensils, etc.)**
- **Service Tax Applicability:**
- Charges for utilities like electricity, cleaning, and utensils provided to the restaurant operator can be seen as part of the overall service provided. If the trust is providing these additional services and charging for them, service tax may apply.
- **Relevant Rule/Notification:** Under the service tax regime, any additional services provided as part of the primary service are typically taxable. Charges for utilities are usually considered part of the service and would be subject to service tax.
### **Case Laws and Legal References:**
- **Mandap Keeper Services:**
- In the case of **CST vs. M/s. S. M. S. S. Finance Ltd.** (2009), the court discussed various components of service tax applicability, which included the primary service as well as ancillary services.
- **Renting of Immovable Property:**
- **M/s. L. G. Electronics vs. CCE** (2009), the tribunal discussed the taxable nature of income derived from renting or lease of property.
- **Service Tax on Commission:**
- **CCE vs. M/s. S. G. Shipping (2007)**, where the tribunal held that commission earned from providing a service falls under taxable services.
### **Recommendations:**
1. **Review Notifications and Circulars:** Regularly review the latest service tax notifications, circulars, and case laws to ensure compliance. Changes in tax regulations and exemptions might affect the applicability.
2. **Consult a Tax Professional:** Given the complexity of service tax and its applicability to charitable trusts, consulting with a tax professional or legal advisor specializing in service tax can provide clarity and ensure compliance with all applicable regulations.
3. **Maintain Proper Documentation:** Ensure that all service agreements, charges, and billing practices are documented and comply with service tax requirements.
By addressing these points, you can better determine the applicability of service tax to the different services provided by the charitable trust.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Is this income indian or foreign income?
- 15ca /15cb whose income tax login? remitter or nri seller's login?
- TDS U/S. 194NF
- GST on export of services and Input Credit
- RCM applicability on Rent Paid by Registered Person to Unregistered Landlord for Residental Building
- ITC temporary reversal and reclaim
- Regarding Documentation & Compliances for Opening of Unit of Pvt Ltd.
- Applicable TDS rate for sale of property in Nov 2024
- GST ON EXPORT COMMISSION
- Should I report my US salary for January, February, March in Schedule FA?
- Inventory of finished goods
- LAST YEAR 2022-23 ITC IN NEXT YEAR 2023-24 REPORITNG IN GSTR-9
- MIS MATCH OF INVOICE NUMBER
- IGST Credit-Show cause notice issued-confusion
- Issue of gst e invoice
- How to adjusted advances given or receipt
- Foreign vendor without PAN unable to to register due to non receipt of OTP on foreign number ?
- 133(6) DIN INVALID format error - ->WHERE TO REPLY 133(6) notice?
- Query for dubts
- Regarding einvoice taken on nil rated sales
Trending Online Classes
CAclubindia
