Service tax applicable on food court

This query is : Open

Harish Chandra (Querist)
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21 October 2011 A Co. ABCD Ltd. develop a mall and in mall some part was occupied by Food court containing 1000 seats and 12 Food Counter.

ABCD Ltd. made agreement with 12 organisation for running one food counter each in Food Court certain space was occupied by each shop and prepare particulars kind of foods and sold to customer and give computer software support.

Food Selling procedure is like below

1. Customer enter into shop and purchase Debit card of certain amount (i.e. Rs. 100, 200, 500 etc.) which is paid to cashier arranged by ABCD Ltd.
2. Customer goes to desired counter and purchased food from counter and swap card in machine situated in counter and in the end money remained in Debit card refunded to Customer by cashier of ABCD Ltd.

Accounting in the book of ABCD Ltd.
1. Net Cash collected from Customer everyday
Cash Dr. 500
To. Debit Card Sale 500
2. Total Sale made during the day
Debit Card Sale 500
To Sale 440
To Vat 60
3. Purchase Dr. 300
Vat Dr. 36
To. Certain Counter 336

4. Certain Counter Dr. 336
To. Cash 336

It is cleared from the above condition Rs. 140 is earned by ABCD Ltd each day

I want to ask about Service tax liability on above income of Rs. 140 each day, Service tax Liable or not

Madhukar N Hiregange

Madhukar N Hiregange (Expert)
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24 October 2011 If the amount collected couldbe said tobe renting of IP as it appears then liability on amount collected would arise.

Harish Chandra

Harish Chandra (Querist)
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24 October 2011 query of abcd ltd. is that they are purchasing food from all 12 outlets and selling it to customer and paying vat on sale of food to customer

and difference in sale and purchase is income, as vat paid so no ques. Of s.tax

but acc. To me income is for giving place in mall to outlet so service tax should be charged on this income portion

please clarify me if i am wrong

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