restaurant services-threshold exemption limit

[sunil mehta]

As confusion is prevailing even among professional community whether threshold exemption limit for restaurant service provider is rs.10 lacs or rs. 25 lacs?    

 

Now, according to me as per Nofn.33/2012 dt.20/06/2012 it is ''aggregate value of taxable services...''

And as per rule 2C of Determination of value service'  (sr.no. 1) it is ''service portion in an activity .......'' --40 % of the total amount charged is the service portion.So if the turnover is 25 lacs then 40 % of 25 lacs is rs.10 lacs will be exempted.If turnover exceeds 25 lacs then only service tax is payable for a new service provider.

Restaurant services is not subjected to Abatement notfn. no.26/2012.This chapter is governed by rule 2C .

Pl. comment on this

C.A. Sunil Mehta

email-id:[email protected]

AI Summary

Restaurant Service Providers: Rs. 25 Lakh Threshold for Service Tax Exemption Under Notification 33/2012 and Rule 2C A discussion in a forum addresses the threshold exemption limit for restaurant service providers concerning service tax. The initial query questions whether the exemption limit is Rs. 10 lakhs or Rs. 25 lakhs. A participant clarifies that, per Notification 33/2012 and Rule 2C, 40% of the total charged amount is considered the service portion. Therefore, if turnover is Rs. 25 lakhs, Rs. 10 lakhs is exempted. Service tax applies only if turnover exceeds Rs. 25 lakhs. Another participant supports this view, noting that the taxable value is 40% of the gross value, qualifying for a Rs. 25 lakhs gross value exemption.