\n

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

 Dated
\nthe 3^{rd<\/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 3^{rd<\/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 1^{st<\/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 1^{st<\/sup> June, 2015. Therefore, effective service
\ntax rate would be 5.6% (14% of 40%) of the total amount charged.<\/p>\n<\/div>\n}