WHETHER SERVICE TAX
CAN BE LEVIED ON FOOD ITEMS
UNDER PICK UP/FREE
HOME DELIVERY SYSTEM
But
what should be the system when neither consumer is served in the
hotel/restaurant nor has enjoyed the ambiance. Can he be levied with service
tax or service charges for merely placing order for packed food/pick up food
under promise of free home delivery?
Office
of Deputy Commissioner ,Central Excise and Service Tax Department got a query dated
22.7.2015 from Apex Restaurant Pvt. Ltd Chandigarh on this issue when consumers
resisted to give service tax on free home delivery system .There was a reply/
clarification on the subject on 13.8 2015 as hereunder-
Food items given under free home
delivery system is a sale of food and no
service is provided, may it be serving food, ambiance of enjoying air cooling,
live entertainment, personalized hospitality etc.Hence no service tax is to be
imposed on such transaction .
There are further two more things clarified-
·
Even while enjoying all
air cooling and central heating facility available in the restaurant /hotels,
service tax can be charged on food at the rate of 5.6% on the food bill.
·
Further, tax can be imposed on 40% of the
total food bill and not on the total bill.
But we see day in and day out that restaurants and hotels are charging service tax on all home deliveries. This is an issue must be brought to the knowledge of department concerned to circulate the policy so as to help the consumers for raising their voice against unfair trade practices being followed by the owners of hotels /restaurants and food caterers .
---------------------------------------------------------------------------------DR PREM LATA
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