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TRADE NOTICE NO. 05/CE/SH/2015 Dated Shillong the 17th July,2015. Subject: Clarification on rate of service tax on restaurant service -- regarding. The Service Tax rate has been increased to 14% with effect from 1st June, 2015. Certain doubts have been raised in regard to abatement on value of services provided in relation to serving of food or beverages by a restaurant, eating joint or a mess, having the facility of air-conditioning or central air-heating in any part of the establishment, at any time during the year. 2. Matter has been examined. Valuation of services provided in relation to serving of food or beverages by a restaurant, eating joint or a mess having the facility of air-conditioning or central air-heating in any part of the establishment, is determined as provided in rule 2C of the Service Tax (Determination of Value) Rules, 2006. In the said rule, 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 has been specified as 40 percentage of the total amount charged for such supply. In Budget, 2015, no change has been made in abatement and the rate of service tax on the abated value has been increased to 14% with effect from 1st June, 2015. Therefore, effective service tax rate would be 5.6% (14% of 40%) of the total amount charged. Hence, with the increase in the applicable rate of service tax from 12.36% (including education cesses) to 14%, the effective rate on such establishments has increased from 4.9% to 5.6% of the total amount charged. 3. It is further clarified that exemption from service tax still continues to services provided in relation to serving of food or beverages by a restaurant, eating joint or a mess, other than those having the facility of air-conditioning or central air-heating in any part of the establishment, at any time during the year. Authority: Circular No.184/3/2015-ST dated the 3rd June, 2015 of TRU. Sd/- (Gaigongdin Panmei) Commissioner C.No.IV(16)05/TECH/TN/SH/2014/6039-55 Date: 20-JUL-2015 Copy forwarded for information and necessary action to:—
1. The Chief Commissioner, Central Excise, Customs & Service Tax, Shillong Zone, “CRESCENS’ Building, M.G Road, Shillong 793001. 2. The Commissioner, Central Excise & Service Tax, Dibrugarh. 3. The Commissioner of Customs (Prev), N.E.R., Shillong. 4. The Commissioner, Central Excise & Service Tax, Guwahati. 5. The Commissioner (Appeals), Central Excise & Service Tax, Guwahati. 6. The Commissioner (Audit), Central Excise & Service Tax, Guwahati. 7. The Assistant Commissioner (P & V), Central Excise & Service Tax, Shillong. 8. The Assistant Commissioner, (Tech/Audit/ST), Central Excise & Service Tax, Shillong. 9. The Deputy/Assistant Commissioner, Central Excise & Service Tax, All Divisions under Shillong Commissionerate with a request to circulate the same to all Superintendent, Central Excise & Service Tax Range under their respective jurisdictions. 10. The Assistant Commissioner, Anti-Evasion, Central Excise & Service Tax, Shillong. 11. All Trade Association/Chamber of Commerce under Shillong Central Excise Commissionerate. 12. All R.A.C. Members under Shillong Central Excise Commissionerate. 13. P.A. to Commissioner, Central Excise & Service Tax, Shillong. 14. The Systems Officer, Computer Cell, Central Excise & Service Tax, Shillong, with a request to upload the Trade Notice immediately on the Commissionerate’s website. 15. Guard File.
Sd/- (T. C. Roy) Assistant Commissioner (Tech) |