Satish Nayak (Manager Accounts & Taxation) (24 Points)
09 July 2012Dear Members,
One of our client has been operationg chain of Restaurants in across india and charging Service Charge on billing and same has been distribute to employees.
Kindly guide us liability under service tax and vat act on collection of service charge collected separately in billing.
Regards,
Satish Nayak
Hetisha
(Semi Qualified CA)
(41 Points)
Replied 09 July 2012
SerTax paid On Service Charge Provided By Restaurant Shall Be Liability for the restaurant And Not Profit That Can be distributed Among Employees.
MJ Krishnamurthy
(ACCT(Retd))
(7197 Points)
Replied 09 July 2012
Mr Satish Nayak,
There is no problem in collecting service charges seperately in bills and distributing it among employees.VAT is as such applicable on the full value of bill(including service charges) and ST also if it is an air conditioned restaurant(star hotels and others) ST is not applicable for ordinary restaurants.....MJK
MJ Krishnamurthy
(ACCT(Retd))
(7197 Points)
Replied 09 July 2012
Mr Satish Nayak,
There is no problem in collecting service charges seperately in bills and distributing it among employees.VAT is as such applicable on the full value of bill(including service charges) and ST also if it is an air conditioned restaurant(star hotels and others) ST is not applicable for ordinary restaurants.....MJK
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