Service tax on event management including catering

[Guest]

Dear Sir,

My bill to the client for conduction event is 1000000. I provided many services including catering. Catering bill is around 600000. Now my confusion is this that  how much is the service tax to be charged ????. As per client they say it will be on 70 percent of total bill as catering is included. For catering i hired a caterer who charged me service tax on 60 percent of the amount and rest he charged me VAT.

So solve this problem with your expertise.

[Guest]

waiting for reply

[Rajesh Nathoo]

Dear Mr. Kalsi,

Your Cateror has correctly charged u Service Tax on 60 percent of billed amount . He has charged ST as per Rule 2C of Sevice Tax ( Determination of Valuation Rules ) ,2006.

Your case is different , u are not a cateror , u are  an event manager . Law has to be read harmoniously to solve ur problem.

If remaining 4,00,000/- includes rent of premises , you can safely charge Service Tax on 70 percent of 10,00,000/- as prescribed under N.T. 26/2012.

However if rent of premises ( least possible) is not included  , Section 66F (3)  will come into picture . If various elements of service are naturally bundled in ordinary course of business, it shall be treated as provision of single service which gives such bundle its essential character .

Now problem starts , ur case has become complicated .

Essential Character of your Service is Event Management which will be taxed at full rate . i.e . 12.36 percent on 10,00,000/-.

.

 

AI Summary

Service tax on event management: bundled catering treated as single taxable service, taxable on full contractual value unless rent included. Service tax on event management invoices depends on whether components are separable or form a single bundled service. A subcontracted caterer may value and tax its supply under valuation rules. If elements like premises rent are separately identifiable, percentage-based valuation guidance may apply; if the elements are naturally bundled and the essential character is event management, the whole contractual value is taxable as the single service.