SC says restaurants not subject to service tax for take away food orders
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While the issue relates to the pre-Goods and Services Tax era, experts note that the Supreme Court ruling has significant implications for the much debated issue of service tax on takeaway food.
“This affirmation by the Supreme Court holds implications on the vexed issue of taxability of take-away food category and provides insight on the presence or absence of a service element in such transactions,” said a note by PwC.
The CESTAT’s ruling placed reliance on an earlier judgment to clarify that, in the case of take away food, the essence of the transaction is the sale of food or packaged items directly over the counter, it further said, adding that this sale is akin to the sale of goods, and it does not involve additional services typically associated with dining, such as table service or facilities for washing and clearing tables.
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