Restaurant

[CS Kushwaha]

we have a canteen run in our factory by an out door caterer, what changes should be made in contract so that the canteen converts in restaurant (non AC) to avoid payment of service tax.kindly suggest.

[CASeetharaman KC]

Outdoor catering service would be attracted if the person who serves the food uses the premises provided by the company for serving the food to the employees.  If you want to convert the same into restaurant then you can probably look at a rental agreement of the premises with the caterer so that he prepares the food and serves the same at prices displayed on a menu card. Also it would be pertinent to note that the restaurant should be open to all people whether they are your employees or not, and if it is Non A/c then service tax should not be attracted. This would fall under the category of any other Non A/c restaurant which caters to any customer 

AI Summary

Factory Plans Canteen Transformation to Public Restaurant to Bypass Service Tax; Considers Rental Agreement with Caterer A factory is considering converting its canteen, operated by an outdoor caterer, into a non-air-conditioned restaurant to avoid paying service tax. The suggestion is to establish a rental agreement with the caterer, allowing them to prepare and serve food at menu-listed prices. Additionally, the restaurant should be accessible to the general public, not just employees, to qualify as a non-air-conditioned restaurant, which would not attract service tax.