Only Air-Conditioned or Air-Heated Restaurants to Pay Service Tax
Updated: Jun 09, 2015 03:53:10pm
New Delhi, June 9 (KNN) Bringing in some relief for the small restaurant owners, government has clarified that at present only air-conditioned or air-heated restaurants are required to pay Service Tax.
Service Tax is chargeable on services provided by restaurants, eating-joints or messes which have the facility of air-conditioning or central air-heating in any part of the establishment at any time during the year in relation to serving of food or beverages, Ministry of Finance said in a release today.
Restaurants, eating-joints or messes which do not have the facility of air-conditioning or central air-heating in any part of the establishment are exempt from service tax, it added.
In respect of such air-conditioned or air-heated restaurants which are required to pay Service Tax, 60 per cent of the value is to be deducted from the total amount charged while applying the rate of Service Tax and tax is to be calculated on the balance 40 per cent.
With the increase in the rate of Service Tax to 14 per cent (subsuming the Education Cesses) with effect from June 1, 2015, the effective rate of tax will be 5.6 per cent of the total amount charged.
Prior to June 1, 2015, when the rate of Service Tax was 12.36 per cent (including Education Cesses), the effective rate was 4.94 per cent. (KNN Bureau)
Service Tax is chargeable on services provided by restaurants, eating-joints or messes which have the facility of air-conditioning or central air-heating in any part of the establishment at any time during the year in relation to serving of food or beverages, Ministry of Finance said in a release today.
Restaurants, eating-joints or messes which do not have the facility of air-conditioning or central air-heating in any part of the establishment are exempt from service tax, it added.
In respect of such air-conditioned or air-heated restaurants which are required to pay Service Tax, 60 per cent of the value is to be deducted from the total amount charged while applying the rate of Service Tax and tax is to be calculated on the balance 40 per cent.
With the increase in the rate of Service Tax to 14 per cent (subsuming the Education Cesses) with effect from June 1, 2015, the effective rate of tax will be 5.6 per cent of the total amount charged.
Prior to June 1, 2015, when the rate of Service Tax was 12.36 per cent (including Education Cesses), the effective rate was 4.94 per cent. (KNN Bureau)
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