Tax on Canteen Service

[Pradeep Kaushik]

Dear Sir/s,

 

Our company, in Gurgaon (Haryana), is providing canteen services to all employees. We have a contract from outside agency, who provides all canteen service.

We are receiving the bill like below:

Total Meal                                               10000.00

Add: Service Tax @ 6.18%                       618.00          (50% Abetment on Total Meal Value)

Add: Vat @ 13.125% 0n 10618/-          1394.00

Total Bill Amount                                    12012.00 

 

Please suggest the tax liabilty on Canteen Service. Is our Vendor is making the Invoice according to Tax Obligation.

Best Regards.

AI Summary

Company Questions VAT on Service Tax for Canteen Services; Seeks Clarity Under HVAT Act A company in Gurgaon, Haryana, provides canteen services to employees through an external contractor. The billing for these services includes a service tax of 6.18% with a 50% abatement on the meal value, and VAT at 13.125% on the total amount including service tax. The company seeks clarification on whether the vendor's invoicing aligns with tax obligations. A respondent suggests that while the VAT calculation appears generally correct, applying VAT on the service tax amount may be incorrect. It is advised to seek clarification from the VAT Department or legal counsel under the HVAT Act.