Outdoor catering service: food value already taxed under VAT/Sales Tax must be excluded from the service tax base.

Outdoor catering service for food supplied on board flights was considered eligible for Notification No. 12/03, as similarly placed providers had already received that benefit. The Tribunal noted that food supplied under the catering contract had suffered VAT/Sales Tax, so its value could not be included again in the service tax base. The lower authority was required to verify the notification properly, exclude the value of food items already subjected to VAT/Sales Tax, and then recompute any differential tax payable. The impugned order was set aside and the matter remanded for fresh adjudication and quantification.

---

---

Issues: Whether the appellants, being providers of Outdoor Catering Service supplying food on board flights, were entitled to the benefit of Notification No. 12/03 dated 20-6-2003 and whether the value attributable to food items on which VAT/Sales Tax had been paid could be included in the service tax base.

Analysis: The appellants supplied food under the catering contract and had paid VAT/Sales Tax on that supply. The Tribunal noted that similarly placed outdoor catering service providers had already been granted the benefit of Notification No. 12/03. Since the records contained the details of food items supplied, the lower authority was required to examine the applicability of the notification correctly and to exclude the value of food items already subjected to VAT/Sales Tax from the service tax computation.

Conclusion: The appellants were held entitled to the benefit of Notification No. 12/03, and the impugned order was set aside with a remand for fresh adjudication and quantification of any differential tax payable after granting the notification benefit.

---