Service Tax on Hotel Industry

CA Saiyum khan (Practicing CA) (690 Points)
Replied 24 March 2011

1. Hotel room tariff having more than Rs.1000

2. Actual bill amount after discount.

3. From the date of the act is enacted in the pariliament.

The threshold limit of Rs.10 lacs would be available.

1 Like

Suraj (819 Points)
Replied 24 March 2011

Thanks Saiyumkhanji.

Can Anuone tell me about the date from which it is applicable to hotel industry?

Nirav Worah (CHARTERED ACCOUNTANT) (396 Points)
Replied 25 March 2011

It will come into effect from a notified date after the enactment of the Finance Bill, 2011.

CA S N Modi (Practice) (66 Points)
Replied 13 September 2011

i want some information regarding establishment of hotel, tax implication as per income tax and service tax, is there any exemption?

vik (student) (113 Points)
Replied 08 November 2011

no exemption???

room income's 70% etc?

Rajesh Kumar (Advocate- Tax) (7806 Points)
Replied 08 November 2011

A short discussion on the issue is in this paper... /articles/service-tax-on-restaurants-hotels-9569.asp

The provisions has come into force with effect from 01.05.2011 vide Notification No. 29/2011 dated 25.04.2011.

Sumit Arora (Manager Accounts) (204 Points)
Replied 21 December 2011

Hello Friends

My company Gave the party in the hotel & Hotel Charged Service tax & VAT on the Gross Amount i.e on the liquor sales .

as per this article restaurant has to charge the service tax on the gross amount ( not only on service charges)

but whether is it fare to charge service tax & VAT both on the gross amount

but it is added to out cost

Waiting for your reply friends

thanks in advance

RENGARAJ R.K (ADVOCATE) (7557 Points)
Replied 21 December 2011

Mr Suraj,

The tax is levied from 01.05.2011 vide notification no.29/2011-ST dt 25.04.2011.

Taxable service: Providing of accomodation for a continuous period of less than 3 months by all types of hotel, inn, guest house, club.

Person liable to tax: Any person providing short term accomodation of service. @ 10.3%

Also see the notn no.31/2011-ST dt 25.04.2011 for exemption when declared tariff less than Rs.1000/- per day. SSI exemption of 10 lacs (threshold limit) is available for this service.

Scope of service: Declared tariff has been defined as charges for all amenities provided and it will include cost of electronic gadgets like TV, installed in the room and any other facility normally provided by a hotel as part of the stay. Declared tariff will not include cost of extra bed but no other exclusions ar provided like charges on account of breakfast, or any other meal whose cost is included in the declared tariff including any discount given to the customer. Tax shall however be payable on 50% of the value as per abatement provided under notn 34/2011-ST dt 25.04.11 by amending notn no.1/2006 dt 1.3.06.

rengaraj r.k

Sumit Arora (Manager Accounts) (204 Points)
Replied 21 December 2011

Thanks Rengataj

Please tell me 1 thing that - the exemption of 50% or 30% is provided only if cenvat credit is not availed by the hotel or resturant

but is it fare to charge Service tax & Vat on both service tax & Vat Amount

wainting for your reply & Comments

Thanks in Advance

RENGARAJ R.K (ADVOCATE) (7557 Points)
Replied 21 December 2011

Mr Arora,

I am attaching the notn itself. Regarding the abatement exemption , cenvat credit is not allowed to be availed either on inputs or input services.

Yes when your local salestax authorities impose tax on such services, vat and service tax is to be collected on the same amount. It is alllowed.

rengaraj r.k

Government of India

Ministry of Finance

(Department of Revenue)

New Delhi, the 25th April, 2011

Notification No.34/2011 – Service Tax

G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 1/2006-Service Tax, dated the 1^st March, 2006, published in the Gazette of India, vide number G.S.R.115(E), dated the 1^st March, 2006, with effect from the 1^st day of May 2011 namely:-

2. In the said notification, in the Table, after S.No.12 and the entries relating thereto, the following S.No. and the entries shall be inserted, namely:-

TABLE

(1)

(2)

(3)

(4)

(5)

“13.

(zzzzv)

Services provided or to be provided, to any person, by a restaurant, by whatever name called, having the facility of air-conditioning 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 its premises;

-

30

14.

(zzzzw)

Services provided or to be provided, to any person, by a hotel, inn, guest house, club or campsite, by whatever name called, in relation to providing of accommodation for a continuous period of less than three months;

-

50

[F. No. 334/3/2011-TRU]

(Sanjeev Kumar Singh)

Under Secretary to the Government of India

Note.- The principal rules were notified vide notification no. 1/2006-Service Tax, dated the 1^st March, 2006, published in the Gazette of India, Extraordinary vide Number G.S.R. 115(E), dated the 1^st March, 2006 and last amended vide notification No.16/2011-Service Tax, dated the 1^st March, 2011, published on the Gazette of India vide Number G.S.R.116 (E), dated the 1^st March, 2011.

RENGARAJ R.K (ADVOCATE) (7557 Points)
Replied 21 December 2011

Mr Arora,

I am attaching the notn itself. Regarding the abatement exemption , cenvat credit is not allowed to be availed either on inputs or input services.

Yes when your local salestax authorities impose tax on such services, vat and service tax is to be collected on the same amount. It is alllowed.

rengaraj r.k

Government of India

Ministry of Finance

(Department of Revenue)

New Delhi, the 25th April, 2011

Notification No.34/2011 – Service Tax

G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 1/2006-Service Tax, dated the 1^st March, 2006, published in the Gazette of India, vide number G.S.R.115(E), dated the 1^st March, 2006, with effect from the 1^st day of May 2011 namely:-

2. In the said notification, in the Table, after S.No.12 and the entries relating thereto, the following S.No. and the entries shall be inserted, namely:-

TABLE

(1)

(2)

(3)

(4)

(5)

“13.

(zzzzv)

Services provided or to be provided, to any person, by a restaurant, by whatever name called, having the facility of air-conditioning 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 its premises;

-

30

14.

(zzzzw)

Services provided or to be provided, to any person, by a hotel, inn, guest house, club or campsite, by whatever name called, in relation to providing of accommodation for a continuous period of less than three months;

-

50

[F. No. 334/3/2011-TRU]

(Sanjeev Kumar Singh)

Under Secretary to the Government of India

Note.- The principal rules were notified vide notification no. 1/2006-Service Tax, dated the 1^st March, 2006, published in the Gazette of India, Extraordinary vide Number G.S.R. 115(E), dated the 1^st March, 2006 and last amended vide notification No.16/2011-Service Tax, dated the 1^st March, 2011, published on the Gazette of India vide Number G.S.R.116 (E), dated the 1^st March, 2011.

RENGARAJ R.K (ADVOCATE) (7557 Points)
Replied 21 December 2011

Mr Arora,

I am attaching the notn itself. Regarding the abatement exemption , cenvat credit is not allowed to be availed either on inputs or input services.

Yes when your local salestax authorities impose tax on such services, vat and service tax is to be collected on the same amount. It is alllowed.

rengaraj r.k

Government of India

Ministry of Finance

(Department of Revenue)

New Delhi, the 25th April, 2011

Notification No.34/2011 – Service Tax

G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 1/2006-Service Tax, dated the 1^st March, 2006, published in the Gazette of India, vide number G.S.R.115(E), dated the 1^st March, 2006, with effect from the 1^st day of May 2011 namely:-

2. In the said notification, in the Table, after S.No.12 and the entries relating thereto, the following S.No. and the entries shall be inserted, namely:-

TABLE

(1)

(2)

(3)

(4)

(5)

“13.

(zzzzv)

Services provided or to be provided, to any person, by a restaurant, by whatever name called, having the facility of air-conditioning 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 its premises;

-

30

14.

(zzzzw)

Services provided or to be provided, to any person, by a hotel, inn, guest house, club or campsite, by whatever name called, in relation to providing of accommodation for a continuous period of less than three months;

-

50

[F. No. 334/3/2011-TRU]

(Sanjeev Kumar Singh)

Under Secretary to the Government of India

Note.- The principal rules were notified vide notification no. 1/2006-Service Tax, dated the 1^st March, 2006, published in the Gazette of India, Extraordinary vide Number G.S.R. 115(E), dated the 1^st March, 2006 and last amended vide notification No.16/2011-Service Tax, dated the 1^st March, 2011, published on the Gazette of India vide Number G.S.R.116 (E), dated the 1^st March, 2011.

RENGARAJ R.K (ADVOCATE) (7557 Points)
Replied 21 December 2011

Mr Arora,

I am attaching the notn itself for eligibility criteria. Regarding the abatement exemption , cenvat credit is not allowed to be availed either on inputs or input services.

Yes, when your local salestax authorities impose tax on such services, vat and service tax is to be collected on the same amount. It is alllowed.

rengaraj r.k

Government of India

Ministry of Finance

(Department of Revenue)

New Delhi, the 25th April, 2011

Notification No.34/2011 – Service Tax

G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 1/2006-Service Tax, dated the 1^st March, 2006, published in the Gazette of India, vide number G.S.R.115(E), dated the 1^st March, 2006, with effect from the 1^st day of May 2011 namely:-

2. In the said notification, in the Table, after S.No.12 and the entries relating thereto, the following S.No. and the entries shall be inserted, namely:-

TABLE

(1)

(2)

(3)

(4)

(5)

“13.

(zzzzv)

Services provided or to be provided, to any person, by a restaurant, by whatever name called, having the facility of air-conditioning 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 its premises;

-

30

14.

(zzzzw)

Services provided or to be provided, to any person, by a hotel, inn, guest house, club or campsite, by whatever name called, in relation to providing of accommodation for a continuous period of less than three months;

-

50

[F. No. 334/3/2011-TRU]

(Sanjeev Kumar Singh)

Under Secretary to the Government of India

Note.- The principal rules were notified vide notification no. 1/2006-Service Tax, dated the 1^st March, 2006, published in the Gazette of India, Extraordinary vide Number G.S.R. 115(E), dated the 1^st March, 2006 and last amended vide notification No.16/2011-Service Tax, dated the 1^st March, 2011, published on the Gazette of India vide Number G.S.R.116 (E), dated the 1^st March, 2011.