02 October 2012
As per service tax exemption notification, restaurants which satisfies both the conditions as mentioned below will be exempted from Service Tax, • Should not have air conditioning or central heating in any part of the establishment • It should not have a license to serve alcoholic beverages. Most of the restaurants have air-conditioning in certain parts of kitchen to handle perishable goods, but may not have air conditioning in the sitting area where guest eats food. What will be the service tax applicability in these cases???
02 October 2012
Service tax is aplicable if restaurant is having both Air Condition and Alcohol service license. If any of the above doest not satisfy , then no service tax.
IF air condition is present in any part of the establishement including even in Kitchen alongwith License for Alcohol, then service tax is applicable.
02 October 2012
So as per CA Nikhil Jhabwar if the restaurant has licence to serve liquor than having air-conditioning only in the kitchen would attract the levy of service tax???
02 October 2012
―Taxable service, means any service provided or to be provided to any person by a restaurant, by whatever name called, having the facility of airconditioning in any part of the establishment, at any time during the financial year, which has licence to serve alcoholic beverages, in relation to serving of food or beverage, including alcoholic beverages or both, in it premises. [Section 65(105) (zzzzv)]
02 October 2012
US Sharma you have quoted is perfectly ok but the Section which you have quoted is incorrect. On 01-07-2012, Section 65 has been deleted and now the services of a restaurant is governed by the exclusion clause of Notification No. 25/2012-ST dated 20 June 2012
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