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___Raja___ (x)     06 March 2014

Charging service tax without service tax registration

I have a question with regards to levy of service tax by a restaurant (AC)

Q1 - Is service tax applicable on home delivery of food

Q2 - Can restaurant levy service tax when it does not have service tax registration yet (The restaurant has been operating for over a year and still they mention on the bill that service tax registration is applied for)

Q3 - If answer to above questions is negative, what action can be taken against such restaurant. To whom should we make a complaint?


 3 Replies

Rama chary Rachakonda (Secunderabad/Highcourt practice watsapp no.9989324294 )     06 March 2014

Service tax has been imposed on restaurants or such establishments, by whatever name called, having licence o serve alcoholic beverages for services provided to any person in relation to servingfood and beverages including alcoholic beverages, by the Finance Act, 2011 wef 1.5.2011 videNotification No. 29/2011-ST dated 25.4.2011. The gross amount charged by the restaurants to service recipient shall be charged to service tax, subject to abetments or exemptions

___Raja___ (x)     06 March 2014

Sir, you have not answered my questions. The restaurant is a pizza outlet. It has AC but does not serve alcoholic beverages. In this context, please answer the questions I have asked

Mahesh V.P. (Advocate)     12 March 2014

No, the restaurant can not collect service tax from the customer without obtaining registration. If they have done so please collect a copy of the bill and you can

a) Demand for a refund by sending a legal notice and proceed to file a consumer complaint.

b) Inform the Commissioner of Central Excise and Service Tax with the evidence.

It may be interesting to note that On 3rd July 2013, the Kerala High court, in Kerala Classified Hotels and Resorts Association and others vs Union of India and others had held that service tax by the Union Government on your restaurant bill is unconstitutional. For further details see my article below.

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