C.No. VI(6)2/S.Tax/TN/SH/2013/13920-80                                                                          Dated : 15.11.2013 

Trade Notice No.04/2013-Service Tax/SH

Dated, Shillong the 13th November, 2013


            Attention of the members of Trade Industry and all others concerned are hereby invited to the Circular No.173/8/2013-ST dated 7th October, 2013 issued under F.No.334/3/2013-TRU by the Technical Officer, TRU of Central Board of Excise & Customs, New Delhi on clarification regarding Restaurant Service. The following clarification has been issued:-

          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:





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.


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.


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.


Board’s Circular No.173/8/2013-ST issued vides F.No.334/3/2013-TRU dated 7th October, 2013.


Disclaimer: Though care has been taken to reproduce the text in its original form, in case of any inadvertent mistake, the above mentioned Circular may be referred to. 



(Gaigongdin Panmei)