Service tax on canteen

[Yatin Bhopi]

We are manufacturer and having Non-AC canteen in factory (not mandatory as factories act). All necessary arrangement for cooking food  i.e. gas, grains, vegetables, pans etc. provided by company upto Rs. 15000 per month. Any excess to this is contributed by employees. Canteen service provider only arrange for cooking food and serving the food in canteen. He charged for manpower supply i.e on 25 percent of value. Whether his billing for man. supply is correct? Or  his service is cover under Sr. No 19 of Not. No 25/2012 service tax is exempt? Pl. guide

[DR.MARIAPPAN GOVINDARAJAN]

Dear Sir,

The billing done by the canteen service provider is correct.  Sl. No. 19 of 25/2012 is not applicable in this case since he provides only manpower for the purposes of canteen.   

Regards,

M. Govindarajan

AI Summary

Service tax on manpower supply: canteen staffing charges are taxable; exemption for canteen service not applicable. Charges for manpower supply by a canteen contractor who only cooks and serves are correctly treated as taxable manpower services; the canteen-service exemption in the referenced notification does not apply where the employer supplies ingredients and arrangements and the contractor provides only personnel.