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

Sales promotion as service may attract service tax unless promoter proves transactions were pure sales via coupons.
The department asserts that amounts recorded as "Sales Promotion" arising from food coupons must be included in the gross amount charged because sales promotion is classifiable as a service under the Board's instruction; the assessee must prove that only sale of food occurred and no service element existed or face service tax recovery.