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

VAT on canteen service: VAT should not be applied to the service tax component, seek statutory clarification.
The vendor's invoice applies service tax after abatement and then levies VAT on the invoice total including the service tax; while the invoice format aligns with the statutory Sales Price concept, VAT is generally chargeable on sale of goods and levying VAT on the service tax component appears incorrect, warranting statutory clarification or legal advice.