{"id":294,"date":"2015-06-11T00:00:00","date_gmt":"2015-06-10T18:30:00","guid":{"rendered":""},"modified":"2015-12-29T11:49:25","modified_gmt":"2015-12-29T06:19:25","slug":"effective-rate-of-service-tax-on-restaurant-having-air-condition-facilities-has-increased-to-5-6-from-1st-june-2015","status":"publish","type":"post","link":"https:\/\/taxclick.org\/type\/services-tax\/effective-rate-of-service-tax-on-restaurant-having-air-condition-facilities-has-increased-to-5-6-from-1st-june-2015\/","title":{"rendered":"Effective rate of service tax on restaurant having air condition facilities has increased to 5.6% from 1st June 2015"},"content":{"rendered":"
\n

<\/a>Circular No. 184\/3\/2015-ST<\/strong><\/p>\n

 Dated
\nthe 3rd<\/sup>
\nJune, 2015<\/p>\n

 F.
\nNo. 334 \/ 5 \/2015-TRU (Pt.)<\/strong><\/p>\n

 Government
\nof India<\/strong><\/p>\n

Ministry
\nof Finance<\/strong><\/p>\n

 Department
\nof Revenue<\/strong><\/p>\n

 (Tax
\nResearch Unit)<\/strong><\/p>\n

***<\/strong><\/p>\n

 <\/p>\n

Dated
\nthe 3rd<\/sup>  June, 2015.<\/p>\n

To<\/p>\n

 Chief
\nCommissioner of Customs and Central Excise (All)<\/p>\n

 Chief Commissioner of Central Excise &
\nService Tax (All) Director General of Service Tax<\/p>\n

 Director General of Central Excise
\nIntelligence Director General of Audit,<\/p>\n

 Principal Commissioner\/ Commissioner of
\nCustoms and Central Excise (All) Principal Commissioner\/Commissioner of Central
\nExcise and Service Tax (All) Principal Commissioner\/Commissioner of Service Tax
\n(All)<\/p>\n

 <\/p>\n

Madam\/Sir,<\/p>\n

 Subject:
\n<\/strong>Clarification on rate of service tax on
\nrestaurant service – regarding.<\/p>\n

 The
\nService Tax rate has been increased to 14% with effect from 1st<\/sup> June, 2015. Certain doubts have been raised in regard to
\nabatement on value of services provided in relation to serving of food or
\nbeverages by a restaurant, eating joint or a mess, having<\/strong> the
\nfacility of air-conditioning or central air-heating <\/strong>in any part of the
\nestablishment, <\/strong>at any time during the year.<\/p>\n

 <\/p>\n

2.
\nMatter has been examined. Valuation of services provided in relation to serving
\nof food or beverages by a restaurant, eating joint or a mess having the
\nfacility of air-conditioning or central air-heating in any part of the
\nestablishment, <\/strong>is determined as <\/strong>provided in rule 2C of the Service
\nTax (Determination of Value) Rules, 2006. In the said rule, service portion in
\nan activity wherein goods, being food or any other article of human consumption
\nor any drink (whether or not intoxicating) is supplied in any manner as a part
\nof the activity, at a restaurant has been specified as 40 percentage of the
\ntotal amount charged for such supply. In Budget, 2015, no change has been made
\nin abatement and the rate of service tax on the abated value has been increased
\nto 14% with effect from 1st<\/sup> June, 2015. Therefore, effective service
\ntax rate would be 5.6% (14% of 40%) of the total amount charged.<\/p>\n<\/div>\n

<\/div>\n

<\/a> Hence, with the
\nincrease in the applicable rate of service tax from 12.36% (including education
\ncesses) to 14%, the effective rate on such establishments has increased from
\n4.9% to 5.6% of the total amount charged.<\/p>\n

 <\/p>\n

3.                 
\nIt is further clarified that exemption from service tax still
\ncontinues to services provided in relation to serving of food or beverages by a
\nrestaurant, eating joint or a mess, other than those having the facility of
\nair-conditioning or central air-heating in<\/strong> any part of the establishment<\/strong>,
\nat any time during the year. <\/strong><\/p>\n

 <\/p>\n

4.               
\nAll
\nconcerned are requested to acknowledge the receipt of this circular. <\/p>\n

 <\/p>\n

5.             
\nTrade Notice\/ Public Notice to be issued. Wide publicity
\nthrough local news media including vernacular press may be given. Hindi version
\nshall follow. <\/p>\n

<\/p>\n

Yours
\nfaithfully,<\/p>\n

  <\/p>\n

(Akshay Joshi)
\nUnder Secretary to Government of India<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

Circular No. 184\/3\/2015-ST  F. No. 334 \/ 5 \/2015-TRU (Pt.) Ministry of Finance  (Tax Research Unit)   Dated the 3rd  June, 2015.  Chief Commissioner of Customs and Central Excise (All)  Director General of Central Excise Intelligence Director General of Audit,   Madam\/Sir,  The Service Tax rate has been increased to 14% with effect from 1st … Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_uag_custom_page_level_css":"","_mi_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[5],"tags":[38],"yoast_head":"\nEffective rate of service tax on restaurant having air condition facilities has increased to 5.6% from 1st June 2015 - All About Finance<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/taxclick.org\/type\/services-tax\/effective-rate-of-service-tax-on-restaurant-having-air-condition-facilities-has-increased-to-5-6-from-1st-june-2015\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Effective rate of service tax on restaurant having air condition facilities has increased to 5.6% from 1st June 2015 - All About Finance\" \/>\n<meta property=\"og:description\" content=\"Circular No. 184\/3\/2015-ST  F. 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