Service tax on items consumed in a bar

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vipin singh (Querist)
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05 January 2013 On a visit to a Bar in Delhi, we were charged service tax @ 4.944% on the ENTIRE BILL and not just on the service charges.

eg.
Liquor consumed : Rs. 2380
Food : Rs. 1415
VAT on Liquor @ 20% : Rs. 476
VAT on Food @ 12.5% : Rs. 176
Service Tax @ 4.944 : Rs. 206
Service Charges : Rs. 379

Isn't service tax only payable on service charges and not on the entire bill? Can anyone please clarify with the details

Kaushik Vinod

Kaushik Vinod (Expert)
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06 January 2013 Hi Vipin,

The Service tax is charged @ 4.944% on the total amount ie sum total of the amount and value of all goods and Services supplied in or in relation to the supply of foods or any other article of human consumption or any drink.
The Valuation by the BAR is Ok.
See Rule 2(c) of Valuation Rules,2006 along with its explanations 1 and 2.

Thanks

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vipin singh

vipin singh (Querist)
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11 January 2013 This is a bit confusing. If I buy these items from a grocerry shop, it only bills be the MRP and Vat and not the service tax on these items.

Are the rules different for bars and shops?

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Kaushik Vinod

Kaushik Vinod (Expert)
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11 January 2013 Dear Vipin,

Basically the BAR is serving liquor in a AC environment on good Chairs.Even they serve in glass you have to just pay for it.

Now conversely if you buy the same brand from outside market they will handover you the liquor with out glass.You have to serve yourself.

vipin Ji its difficult to calculate the Service portion and goods portion therefor this all is done.

Thanks