Applicability of service tax on privilege cards

[Shreenivaas Nallur Dharma Rau]

does service tax attracts on privilege cards issued by a hotel? if food and beverage is also provided under conession doest it also attracts service tax?

[Brijesh Verma]

In my view, the cards offered by the Hotels are merely in the nature of 'DISCOUNT CARDS'. As such there is no element of Service in this process. Moreover restaurants donot attract service tax and so the discount offered for F&B would have no consequence as far as service tax is concerned.

[Mukesh Kumar]

You need to determine the nature of privilege card. Therefore, you would lead to find the appropriate category of taxable service. Some times, it may be a form of membership card and would attract club membership category of taxable service. Some time it is a promotional activity of outdoor catering. Some time it is purchase of goods or room rents. There can not be a dedicated answer to the query since the scope is wide enought. Apparantely i agree with another answer that privilage card is nothing which is taxable as such. Only correct nature would help to determine the correct nature.

[Surender Gupta]

Only the actual nature of privilege cards would help to solve the query.

[Shreenivaas Nallur Dharma Rau]

thank you all

AI Summary

Service tax on privilege cards depends on nature: discount cards likely non-taxable, memberships can be taxable. Privilege cards that function solely as discount cards-offering price reductions for food, beverage or accommodation without providing a distinct service-do not ordinarily attract service tax. However, where the card constitutes a membership service or bundles taxable services (such as club membership benefits, outdoor catering, or packaged room rent), the arrangement must be characterised on its true nature and may become liable to service tax.