Please Help: service tax on hotels

Posted Date : 08-May-2012 , 05:05:09 pm | Posted By sourabh mehra

A restuarant is charging from its customers on account of breakage of glasses and plates say amount Rs.5000
i want to know that whether restaurant is required to pay service tax on this amount
or
this amount is chargeable under Vat?

Category : Service Tax | Answers : 3 | Comments : 1 | Hits : 314

Answers

Answer By: Rishabh Upadhyay

Such case in my opinion does not fall under the category of sale or services, Also the restaurant must not be raising saidle bill for the food as well as the breakage. The receipts of such nature will go to head misc income and nor service tax neither sales tax will be applicable

Answer By: Rishabh Upadhyay

Kindly read "Single" in place of "saidle",, thanks

Answer By: Ashish Chaudhary

Service tax is chargeable under restaurant when service is provided "in relation to serving of food or beverage". In the instant case, consideration received is not towards any service. In our view, it may not be liable to service tax. As regards to VAT, as there is no sale, there is no liability to pay VAT.
It may be liable to service tax once Negative list based service tax is implemented.