Please Help: abatement on restaurant service

Posted Date : 23-Apr-2012 , 03:10:45 pm | Posted By sourabh mehra

According to notification 13/2012 dt. 17/03/2012-----abatement applicable to restaurants is 70% (which i have studied from site www.cbec.in)

but there is also a RULE 2C WHICH states that abatement applicable on restaurants is 60%

i want to know which provision will prevail, whether 60% or 70% abatement will apply ?

Category : Service Tax | Answers : 2 | Comments : 1 | Hits : 1533

Answers

Answer By: CA VIPIN GARG

Dear Sourabh, in case of restaurants the abatement is only 60% and not 70% as per the latest amendment made in the budget.

Hope you got the answer you were looking for, have a nice day.........

Answer By: Ashish Chaudhary

Notification No. 13/2012 provides percentage of value on which service tax is chargeable. Tax is payable on 70% of value after taking abatement of 30% in case of supply of food.
However, for restaurants, applicable provision would be as per Rule 2C of valuation rule which provides for exemption of 60% i.e. tax should be charged on 40% of the value.
Above provision would become effective from the date of negative list provisions coming into effect.
At present, abatement to restaurant continues at 70% as per notification No. 1/2006 as amended by Notification No. 34/2011-S.T., dated 25-4-2011.