Circular No.173/8/2013 – ST, F.No.334/3/2013-TRU,
dated 7th
October, 2013
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.
2. In this context, representations have
been received. On the doubts and questions raised therein clarifications are as follows:
Doubts
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Clarifications
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1.
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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?
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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.
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2.
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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?
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Yes. Services
provided by specified restaurant in other areas of the hotel are liable to
service tax.
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3.
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Whether service tax is leviable on goods sold on
MRP basis across the counter as part of the Bill/invoice.
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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.
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3. Trade
Notice/Public Notice may be issued to the field formations and taxpayers.
Please acknowledge receipt of this Circular. Hindi version follows.
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