Service tax on Restaurant services – Calculation Details

Service tax on Restaurant services– Estimation Details. How is Service tax for Restaurant services calculated? Now you can scroll down below n check more information for “ Service tax on Restaurant services”

Service tax on Restaurant services

Service charges:

Most of individuals are confused regarding the service charges and they consider it to be charged by the federal government therefore they pay it whatever they ask. These charges are imposed by the owners for the services they supply to the consumers. The owners can charge whatever quantity they can charge, however the only condition is that they require to discuss the same in the menu. If not discussed in the menu list than they can not charge any penny in the name of service fee as they have not communicated the exact same to the consumer. Generally restaurants charges service fee as 5% to 10% of the overall costs. This service fee is usually for the team member, so it might be referred as pointer only therefore you must not fret if you do not supply pointer to the waiter as indirectly you have paid the same.

Service Tax:

As we do not just obtain food from the dining establishment, there is also service portion involved, where the waiter serves the food, air conditioner, electrical power etc. which need to be charged but the service tax need to not be charged on the complete quantity and therefore federal government has actually also offered reduction for the products portion. Current Service tax rate is 14.5%, which makes service tax successfully to 5.8% after abatement.

Should Check Out–

• How to lower the Service Tax Liability?– Tax Preparation
• Service Tax Registration Treatment and Documents needed
• Treatment for Online E- Registration of Service Tax
• No Service Tax on Free Home Delivery/Pick up of Food
• Swachh Bharat Cess– Levy, Collection & Point of Taxation

Conditions for levy of service tax:

The only condition for levy of service tax is the presence of a/c unit or centralized heating system in the dining establishment. The analysis of the words needs to be very appropriate. Here the words are a/c unit and not centralized a/c, so if there is one A.C. in the entire dining establishment then likewise the hotel would be liable to charge service tax.

Exemptions from service tax— There are mainly 2 major exemptions available to the assessee. They are:

1. From 22-10-2013, services supplied by the way of canteen in the factory as covered in Factories Act, 1948 and likewise having the center of A.C. in the restaurant are not responsible to charge the service tax.
2. For reliving the little service companies from the service tax, there has been the standard exemption from the paying the service tax. If the overall service worth goes beyond the fundamental exemption limit of Rs 10 lacs than the company requires to charge the tax from the consumers and pay tax.