service tax liability of five star hotel

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

22 December 2009
I have observed that some of the hotel were charging VAT 12.5% and Service tax @ 10.30% on basic cost of food as mentioned below:

Example:

Lunch costs 36000

Add: VAT 12.5% on Rs.36000 4500

Add: Service tax 10.30% on
Rs.36000/- 3708

----------
Grand total 44208
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I have a doubt whether both VAT and service tax is payable on basic costs.

Please clarify whether the above method of charging service tax is correct.

thanks & regards

T. Saravanakumar

haridhayalan

haridhayalan (Expert)
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22 December 2009 as per my knowledge, only one is applicable. if you stay in the hotel then service tax will be applicable.

ANIL JANGID

ANIL JANGID (Expert)
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22 December 2009 Renting of room/banquates added as 91a in a schedual of service tax from 2007-08.Hence service tax applicable on such receipts.
(2) Indoor catering is exempted from service tax/but vat is applicable.

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