Please Help: Service Tax on Free Home Delivery Restaurants
Posted Date : 27-Apr-2013 , 11:19:23 am | Posted By Adil Malik
Service Tax Applicable or not on Free Home delivery by restaurants. if yes ? under which notification
Category : Service Tax | Answers : 2 | Comments : 2 | Hits : 342
Answers
Answer By: Vikky Kumar Jha
http://freepressjournal.in/service-tax-on-take-away-ordershome-delivery-too/
New Delhi : After laying the service tax levied on the air-conditioned restaurants from the current fiscal, the finance ministry is contemplating to extend the service tax also to the take-away orders and the home delivery of food.
Even as a notification is being readied, the restaurant and hotel owners have petitioned that no services are used by the customers placing the take-away orders and themselves picking up the food to be brought under the service tax. They have also protested at the tax proposed to be levied on the food ordered telephonically since they don”t use the restaurant premises at all.
The ministry officials, however, say the service tax has to be levied to prevent disparities in the tax collection. They said the notification will put an end to the ambiguity on whether such transactions are to be taxed or not.
Associations of restaurants and hotels have petitioned the ministry to even waive the service tax levied on the air-conditioned restaurants on the ground that the rates charged are the same in the air-conditioned and the non-air-conditioned parts of the restaurants.
New Delhi : After laying the service tax levied on the air-conditioned restaurants from the current fiscal, the finance ministry is contemplating to extend the service tax also to the take-away orders and the home delivery of food.
Even as a notification is being readied, the restaurant and hotel owners have petitioned that no services are used by the customers placing the take-away orders and themselves picking up the food to be brought under the service tax. They have also protested at the tax proposed to be levied on the food ordered telephonically since they don”t use the restaurant premises at all.
The ministry officials, however, say the service tax has to be levied to prevent disparities in the tax collection. They said the notification will put an end to the ambiguity on whether such transactions are to be taxed or not.
Associations of restaurants and hotels have petitioned the ministry to even waive the service tax levied on the air-conditioned restaurants on the ground that the rates charged are the same in the air-conditioned and the non-air-conditioned parts of the restaurants.
Answer By: Vikky Kumar Jha
In the absence of proper clarity on a service tax provision, most home-delivery chains, takeaway joints, food & beverage outlets at theatres, self-service outlets and a clutch of air-conditioned entities are likely to play safe and impose the tax .
Comments
Adil Malik
29-Apr-2013 , 11:24:19 amIt is worthwhile to note here that in case of transaction involving Free home delivery of food, the dominant nature of the transaction is that of a sale and not service as the food is not served at the restaurant and no other element of service which is offered at the restaurants be it ambience, live entertainment, if any, air conditioning, or personalized hospitality is offered.Furthermore, no amount is charged for such free delivery of food. It be clarified that free home delivery, being mere sale of food, should not be liable to service tax
CA MANI
29-Jun-2013 , 11:30:49 amnow as per notification, service tax will not be levied on free home deliveries. firstly when revenue imposes service tax on air conditioned restaurants, it results they started to impose tax on free home deliveries. but now service tax will not be charged on free home deliveries. Also 60% abatement is also given to restaurants on bill amount. only air conditioned restaurants will charge service tax 40% bill amount due.