Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise & Customs
Tax Research Unit
Circular No.173/8/2013 – ST
North Block
New Delhi, 7th October, 2013
To
Chief Commissioners of Central Excise and Customs (All),
Director General (Service Tax), Director General (Central Excise Intelligence),
Director General (Audit),
Commissioners of Service Tax (All)
Commissioners of Central Excise (All),
Commissioners of Central Excise and Customs (All).
Madam/Sir,
Subject: Restaurant Service- clarification -regarding
As part of the Budget exercise 2013, the exemption for services provided by
specified restaurants extended vide serial number 19 of
Notification 25/2012-ST
was modified vide para 1 (iii) of
Notification 3/2013-ST. This has become
operational on the 1st of April, 2013.
- In this context, representations have been received. On the doubts and
questions raised therein clarifications are as follows:
|
Doubts |
Clarifications |
| 1. |
In a complex where air conditioned as well as non-air conditioned restaurants
are operational but food is sourced from the common kitchen, will service tax
arise in the non-air conditioned restaurant? |
Services provided in relation to serving of food or beverages by a restaurant,
eating joint or mess, having the facility of air conditioning or central air
heating in any part of the establishment, at any time during the year
(hereinafter referred as ‘specified restaurant’) attracts service tax. In a
complex, if there is more than one restaurant, which are clearly demarcated and
separately named but food is sourced from a common kitchen, only the service
provided in the specified restaurant is liable to service tax and service
provided in a non air-conditioned or non centrally air- heated restaurant will
not be liable to service tax. In such cases, service provided in the non
air-conditioned / non-centrally air-heated restaurant will be treated as
exempted service and credit entitlement will be as per the Cenvat Credit Rules. |
| 2. |
In a hotel, if services are provided by a specified restaurant in other areas
e.g. swimming pool or an open area attached to the restaurant, will service tax
arise? |
Yes. Services provided by specified restaurant in other areas of the hotel are
liable to service tax. |
| 3. |
Whether service tax is leviable on goods sold on MRP basis across the counter as
part of the Bill/invoice. |
If goods are sold on MRP basis (fixed under the Legal Metrology Act) they have
to be excluded from total amount for the determination of value of service
portion. |
- Trade Notice/Public Notice may be issued to the field formations and
taxpayers. Please acknowledge receipt of this Circular. Hindi version follows.
Yours sincerely,
(S. Jayaprahasam)
Technical Officer, TRU
Tel: 011-2309 2037
F.No.334/3/2013-TRU