No Service Tax on Free Home Delivery/Pick up of Food

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No Service Tax on Free Home Delivery/Pick up of Food

Introduction:–LRB-

It was a broad concern amongst the big restuarants amongst the country such as Dominos, Pizza Hut, and so on for the issue that would service tax be responsible for foods provided for home dleivery where no service is acually provided. Inspite of this issue all the huge restaurants lack of knowledge of the truth that no service is supplied where charging service tax for the very same. The option was addressed by among the courts as the problem arrised for the service tax non payment of among the restaurants. The Quick of the same is discussed here.

Explanation:–LRB-

The above issue was dealt with by one of the restaurants called as M/S PEAK RESTAURANTS PVT LTD., in which the restaurants didn’t gathered and paid the service tax to the department. In which the department reacted back and to that concern the information was given by the dining establishment which was absoulety appropriate and the department likewise authorized the explanation and the department released a brand-new notificaion for the same dated 13 th August 2015.

It was the case of M/S Pinnacle Resturants Pvt Ltd V/S Central Import Tax Department of Chandigarh Where it was quite quickly clarified that the food which was delivered at the home as complimentary delivery without any of the other emoluments will not be covered under the definition of service and thus no service tax liability will develop.

The notice was plainly mentioning that “the dominant nature of deal is sale and not service as the food is not served in the restaurant and further no aspect of service which is provided at the restaurants, be its ambience, live home entertainment, if any, a/c or customized hospitality is provided”. It clearly indicates the physical shipment of the food at the restaurants having any of the above facility is just liable to collect and pay service tax otherwise not.

The Service Tax can be levied just where there is typically “Service” involved which is suitable in case of restaurants where service is really involved, which suggests that if for eg. Hotel X is not Air conditioner then it won’t be responsible for collecting and paying service tax but if Hotel Y is having Air conditioner however not having Live Home entertainment then likewise service tax liability will emerge as specially states that it must cover “any” of the above and not “all” of the above.

Need To Read

  • Swachh Bharat Cess– Levy, Collection & Point of Tax
  • Secondary services by Product Transportation Agency
  • When the Power to Arrest develop in Service Tax?
  • Service Tax & New ST Tax Rate

Exception:–LRB-

The Huge Exception to it is that there would be no service tax only when there is “Free” Delivery or Pick up, If separate charges for the same are charged in the billing then there would be service tax liability on the service tax provider. For Eg if Hotel Z offers Free Home Delivery upto 3 kms from the shop then if the order is delivered within 3 kms would be exempt but beyond 3 kms it would be taxable.

Approval:–LRB-

The alert was offered by the deputy commsioner on 13 th August 2015, with the previous approval of Additional Commsioner and the exact same is in force from the stated date.

Official Notification

No Service Tax on Free Pick up-Home Delivery of Food from Restaurants

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