hall charges received for party by a restaurent

[NAND LAL JAIN]

we are running a restaurant, providing kitty parties of 20 to 25 persons. We are charging as under: 

 

Rs. 1000/- per person + vat 12.5% + service tax with 60% abatement.  

and hall charges of Rs. 5000/- .

Now question is : In which category of Services we should consider hall charges. i.e. under Business Auxiliary Services (In which we have to pay service tax on 100% amount)  OR

 

under short term Accommodation services (In which we have to pay services tax on 50% amount) and

also whether we have to charges luxury tax if so how much amount. 

 

 

[Rama Krishana]

Billing terms my be different i.e. lump sum plus per person but the nature of activity appears as one and only one which may be classified as bundled service tax by way of supply of food and providing accommodation. Therefore rate of abatement is same for all the items. You need to pay service tax after abatement @70%.

AI Summary

Restaurant's Kitty Party Charges: Bundled Service Tax Rate with 70% Abatement, No Separate Hall Charge Categorization A restaurant hosting kitty parties charges Rs. 1000 per person plus VAT and service tax with 60% abatement, along with hall charges of Rs. 5000. They seek guidance on categorizing hall charges under Business Auxiliary Services or short-term Accommodation Services, and whether luxury tax applies. The response suggests treating the activity as a bundled service, applying a consistent service tax rate after 70% abatement, implying no separate categorization for hall charges.