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Service tax on meals provided to employees

Bhuwan (article) (29 Points)

07 February 2013

A company is providing meals in it's canteen to it's staff at concessional rates and thereby deducting these meal expenses from it's employees salary on monthly basis. Would it be under the purview of service tax under the services other than in negative list? Please suggest.

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3 Replies

Madhukar N Hiregange (Chartered Accountant) (39034 Points)
Replied 07 February 2013

The declared services includes the activity wherein food etc is supplied. Under exemption we have sl no. 17 restaurants, eating joints or mess liable only if they have a/c + licen\se to serve liquor. Maybe we can claim the exemption even if amount are recovered.

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Bhuwan (article) (29 Points)
Replied 07 February 2013

Originally posted by : Madhukar N Hiregange
	The declared services includes the activity wherein food etc is supplied. Under exemption we have sl no. 17 restaurants, eating joints or mess liable only if they have a/c + licen\se to serve liquor. Maybe we can claim the exemption even if amount are recovered.

Thanks Mr. Madhukar, moreover i have found out that a draft circular 354/127/2012 has been issued by TRU whereunder it is clear that mega exemption would be valid in this case.

CA Saravanakumar (Practice) (59 Points)
Replied 07 February 2013

Dear Madhukar Sir,

I agree to your reply that as per mega exemption notification, mere AC restaurant or mess or eating joint without any license to serve alcohol is exempt. I have a query in this context?

Suppose, food is supplied by an out door caterer at the company's canteen, then would it be taxed as Outdoor catering service?

Thanks in advance!

Saravanakumar G.