levy of service tax on non Air Conditioned eating joint/canteen in factory.

[vinay wakde]

Ours is a public limited company.  The Canteen (outdoor Catering service) facility is provided within the  factory premises to our workers/staff.  The eating joint/ Canteen is non Air-conditioned.   From 1^st April, 2013 places having air-conditioning facility shall be liable to Service Tax. However, restaurants which are in open air or garden or on terrace where no air-conditioning is available should not be charging service tax.

Kindly let us know whether no service tax shall be leviable on Canteen (outdoor catering service)facility provided by the service provider w.e.f. 01/04/2013 onwards, as the place of canteen is non A.C. or Service tax will be levied only 40 percent of the total bill assuming that 60 percent goes in the cost of food sold.

Regards,

VINAY

AI Summary

Company Inquires About Service Tax Applicability on Non-Air-Conditioned Canteen; Clarified as Outdoor Catering Taxable Service A public limited company inquires about the applicability of service tax on a non-air-conditioned canteen within its factory premises, effective from April 1, 2013. The question arises because air-conditioned venues are subject to service tax, while open-air or non-air-conditioned places are not. The company seeks clarity on whether the canteen service is exempt from service tax or if only 40% of the bill is taxable, assuming 60% covers food costs. The response clarifies that the service falls under Outdoor Catering Taxable Service rather than Restaurant Services.