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service tax query

sumitG (entrepreneur) (80 Points)

06 June 2011

incase of service tax for hotels. the hotel is supposed to pay service tax if the room tariff is more than Rs1000. however my question is if the hotel charges lets say Rs2000 but this amount includes the meals(eg breakfast), in that case what will be the amount at which the hotel should charge service tax as Rs2000 is for both room tariff and meals.

Kindly send your replies ASAP.

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10 Replies

CA Unnikrishnan Nair N (Chartered Accountant) (2083 Points)
Replied 06 June 2011

Department had clarified that if the tariff is composite, say complimentary break fast , no exclusion on account of value of food is allowed. However, as long as the rent and meal charges are separate, ST is payable only only rent.

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sumitG (entrepreneur) (80 Points)
Replied 06 June 2011

if the room tariff is Rs1100 and the hotel provides a discount of Rs300.

Will the hotel will be liable to pay service tax, if yes then whether it shall be paid on the amount charged after discount i.e Rs800 or Rs1100.

CA Unnikrishnan Nair N (Chartered Accountant) (2083 Points)
Replied 07 June 2011

Tax is to be paid on Rs.800/-

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Mahesh (Article Assitant) (21 Points)
Replied 07 June 2011

Whether Rs. 9.00 lacs exemption limit appliable for the following services?

1. Restaurant Services

2. Accomodation Services

CA ADITYA SHARMA (CA IN PRACTICE ) (16719 Points)
Replied 08 June 2011

yes tax to be paid on 800

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Rajan Prasad Gupta (Sr. Accountant) (21 Points)
Replied 08 June 2011

Dear Sir,

I would like to request you to please guide me how to calculate the service tax liablity. I have below mentioned the bill format which we have raised to our client and thereafter we have recd payment. Our company has registered under work contract tax.

Example :-

Total work done Rs.100/- ( Work done includes work contract tax i.e. 4%)

So, the assessable value Rs. 100/1.04 = Rs.96.15

Total Service Tax calculated on Assessable value (Rs.96.15 X 4.12%) = Rs.3.96

Now the total bill value Rs. :-103.96/-

Work Done :- Rs.100/-

S. Tax :- Rs.3.96/-

Party give us the total payment Rs.97.74/- after deduction of TDS @ 2% (Rs.2.07/-), WCT @ 4%(Rs.4.15/-) on Gross Value i.e. Rs.103.96.

Sir, I have above mentioned all the details procedure of bill raised and payment recd after deduction of TDS and WCT.

So, please guide me how we calculate the service tax liablities because client has deducted the WCT on total value i.e. gross bill + service tax.

Kindly do the needful at an earliest.

Thanks & Regards,