Reply:
Query- a) To pay service tax and leave service charge, as service charge is not mandatory
Service Tax cannot be avoided merely by not expressly showing Service charge. 40 % or 60% will be deemed to be the Service Charge, an d Service Tax plevied accordingly
Query- b) to check whether the service tax is levied on whole billed amount or just on service charge as I am bit confused that whether service tax is levied on service charge or on whole billed amount
Service Tax is levied on the whole billed amount as prescribed in Rule 2C extracted below:
Determination of value of service portion involved in supply of food or any other article of human consumption or any drink in a restaurant or as outdoor catering.-
2C. Subject to the provisions of section 67, the value of service portion, in an activity wherein goods being food or any other article of human consumption or any drink (whether or not intoxicating) is supplied in any manner as a part of the activity at a restaurant or as outdoor catering, shall be the specified percentage of the total amount charged for such supply, in terms of the following Table, namely:-
Table
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Sl.No.
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Descriptttion
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Percentage of the total amount
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|
(1)
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(2)
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(3)
|
|
1.
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Service portion in an activity wherein goods, being food or any other article of human consumption or any drink(whether or not intoxicating) is supplied in any manner as a part of the activity, at a restaurant
|
40
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|
2.
|
Service portion in outdoor catering wherein goods, being food or any other article of human consumption or any drink(whether or not intoxicating) is supplied in any manner as a part of such outdoor catering
|
60
|
Explanation 1.- For the purposes of this rule, "total amount" means the sum total of the gross amount charged and the fair market value of all goods and services supplied in or in relation to the supply of food or any other article of human consumption or any drink(whether or not intoxicating), whether or not supplied under the same contract or any other contract, after deducting-
(i) the amount charged for such goods or services, if any; and
(ii) the value added tax or sales tax, if any, levied thereon:
Provided that the fair market value of goods and services so supplied may be determined in accordance with the generally accepted accounting principles.
Explanation 2.- For the removal of doubts, it is clarified that the provider of taxable service shall not take CENVAT credit of duties or cess paid on any goods classifiable under Chapters 1 to 22 of the Central Excise Tariff Act, 1985 (5 of 1986).]
Query- c)if I go into an A/C restaurant, which doesnt have liquor license, am I supposed to pay service charge?
Answer: Yes;
Entry No 19 of Notification No 25/2012 ST dated 20.06.2012 exempts:
19. Services provided in relation to serving of food or beverages by a restaurant, eating joint or a mess, other than those having
(i) the facility of air-conditioning or central air-heating in any part of the establishment, at any time during the year, and
(ii) a licence to serve alcoholic beverages;
So, service tax is applicable if the restaurant has the facility of air-conditioning or central air heating in any part of the establishment at any time during the year.
