Food related services under service tax law :
Service portion in hotel/ catering contract 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.
Exemption aspects : The exemptions has been provided in respect of works contract vide exemption Notification No -25/2012,dated 20-06-2012, under Entry No.- 9,19 & 19A.
Other aspect:
1.As per Rule 2C of service tax (determination of value )rules ,2006 which says that ,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 –
- If service is provided in a restaurant ,then value of service portion is taken as 40% of the total amount charged.
- If service is provided as part of outdoor catering ,then value of service portion is taken as 60% of the total amount charged.
Note- No CENVAT Credit of duties or cess paid on any goods classifiable under chapter 1 to 22 ( food related items ) of the CETA,1985
2.In case of a bundled service by way of supply of food or any other article of human consumption or any drink ,in a premises (including hotel ,convention centre, club, pandal, shamiana, or any place specially arranged for organizing a function ) together with renting of such premises—30% of the amount charged is exempt from tax.
Note-No CENVAT Credit of duties or cess paid on any goods classifiable under chapter 1 to 22 ( food related items ) of the CETA,1985
3.In case of goods sold on MRP basis ( fixed under the Legal Metrology Act ) ,then they have to be excluded from total amount for the determination of value of service portion in view of Circular No. 173/8/2013-ST,Dated 07.10.2013.