service tax on other income

[MUKUND THAKKAR]

Sir,

owner of resturant have recevied the letter from service tax dept. that service tax is pay against the income shown in balance sheet of year 2013-14 Rs, 20 lkhs under head of ' OTHER INCOME' , In fact other income is pertaining to sales promotion.

In the year 2013-14 resturant owner's sell the food coupen to their future customer,

As and when customer coming for meal they have used this food coupen and getting the items ' order one items and get one ordered item free' exempale ordered one soup and one free.

please clerify following..

1.Service tax is applicable on ' other Income' which has pertaining to sales promotion, books of account is clearly mention income agianst sales promotion.

AI Summary

Restaurant Owner Challenges Service Tax on Rs. 20 Lakhs 'Other Income' from Food Coupons, Citing No Service Involvement A restaurant owner received a notice from the service tax department regarding service tax on 'Other Income' of Rs. 20 lakhs for the year 2013-14, which was recorded as sales promotion income. The owner sold food coupons offering a 'buy one, get one free' deal. An expert advised that the income should not have been labeled as 'sales promotion' in the accounts, as it led to the tax issue. The expert suggested that the owner argue no service was involved, only food sales, to avoid tax liability. The discussion also highlighted the importance of consulting experts to prevent such issues.