OFFICE BEARERS : PRESIDENT:C.NAGENDRAN-9443443054 SECRETARY :K.SIVAMOORTHY - 9994240223 TREASURER: C.KARTHIKA VICE PRESIDENT: 1.S.MOHAN 2.V.CHANDRASEKAR 3.V.RAVINDRAN 4.M.KUPPAMUTHU ASST SECRETARY: 1.M.EZHILARASAN 2.R.SARAVANAN 3.R.MURUGESWARI 4.P.GANESAN ASST TREASURER:S.HABEEB ORGANIZING SECRETARY:1.S.V.PARAMASIVAM 2.S.PANDIAN 3.M.RIKHASMOHAMED

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Wednesday, 10 June 2015

Clarification Issued in the Matter of Service Tax

Clarification Issued in the Matter of Service Tax; Only Air-Conditioned or Air-Heated Restaurants to Pay Service Tax; Restaurants, Eating-Joints or Messes Which Do Not Have the Facility of Air-Conditioning Or Central Air-Heating in Any Part of the Establishment are Exempt from Service Tax.

At present, Service Tax is chargeable on services provided by restaurants, eating-joints or messes which have the facility of air-conditioning or central air-heating in any part of the establishment at any time during the year in relation to serving of food or beverages. Restaurants, eating-joints or messes which do not have the facility of air-conditioning or central air-heating in any part of the establishment are exempt from service tax. In other words, only air-conditioned or air-heated restaurants are required to pay Service Tax.

In respect of such air-conditioned or air-heated restaurants which are required to pay Service Tax, 60% of the value is to be deducted from the total amount charged while applying the rate of Service Tax and tax is to be calculated on the balance 40%. With the increase in the rate of Service Tax to 14% (subsuming the Education Cesses) with effect from 1.6.2015, the effective rate of tax will be 5.6% of the total amount charged. Prior to 1.6.2015, when the rate of Service Tax was 12.36% (including Education Cesses), the effective rate was 4.94%.

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