Please Help: service tax on hotels
Posted Date : 01-May-2012 , 07:58:44 am | Posted By: Sourabh Mehra
Category :
Service Tax | Answers :
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1. when hotel is providing temporary accomodation, it charges the servic e tax and also luxury tax. I want to know that whether along with room rent , luxury tax is also added for levying service tax.
Room Rent = 2000
Luxury tax= 200 (10%)
Whether service tax is levied on 2000 or 2200?
2.My another question is that when food and breverages is also provided in hotel room , whether sale of food & B is also added in levying of service tax
Room Rent =2000
Luxury Tax= 200
Food sold in room = 800
Vat Rate =13.75%
On what amt service tax would be leviable and what will the amt of service tax? |
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Answers:
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 Answer by: Vikash Kumar Jha |
| Dear Saurav, in case of short term accommodation, luxury tax will be excluded and you have to pay service tax as 12.36% of the value of(50% of hotel room rent 2000 ) because 50% abatement you will get here.
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| Answer by: Vikash Kumar Jha |
| Another thing i want to add to this is " Service tax is not liveable on a transaction treated as sale of goods and subjected to levy of sales tax /VAT
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| Answer by: Ashish Chaudhary |
| (i) Service tax not chargeable on the value of luxury tax as clarified by Circular No. 139/8/2011-TRU, dated 10-5-2011. In your case, ST should be chargeable on Rs. 2,000/- @12.36% after taking abatement of 50%.
(ii)As regards to the serving of food in the hotel room, it is clarified by the above circular that service tax cannot be charged on the value of food served in the hotel room. So if the value of food is shown separately in the invoice, no need to charge the service tax on food and beverages value.
Please note that the second point may not be applicable after introduction of Negative list based service tax which is yet to come into operation.
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