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Is service tax applicable to canteen contractors?

Viral Gajjar (B.Com) (52 Points)

03 November 2012

Dear Friends,

We are running a canteen in our company and We have to pay amount to canteen contractors. Every month we pay him around Rs. 1.90 to 2 lac. So, Please let me know Service tax in applicable for the same case....

Regards,

Viral Gajjar

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2 Replies

@VaibhavJ (Believe!! Live your dreams!) (33516 Points)
Replied 03 November 2012

Hi,

Para 11 of draft circular F. No 354/127/2012-TRU dated 27-7-2012 reads as follows -

‘Whether the services provided by the employer are otherwise covered by the Negative List or exempt. For example, the services of food and catering provided by the employer in a canteen would normally fall outside the tax net unless such canteen has both the facility of air-conditioning as well as license to serve liquor (S. No. 19 of the Mega exemption)’.

Thus, the draft circular acknowledges the fact that the mega exemption notification exempts canteen provided by employer [Even if the circular is only draft circular, if whatever stated in the circular is correct, it will continue to be correct even if final circular is not issued on this aspect.

Read more here: https://www.dateyvs.com/canteen-services-and-food-services/

Thanks//Vaibhav
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