SERVICE TAX LIABILITY ON HOTELS & RESTAURANTS AFTER SWACH BHARAT CESS w.e.f. 15-11-15

Posted By on November 9, 2015

The Central Board of Excise and Customs (CBEC) has issued notification no. 21/2015 dated 06-11-2015 through which the Swach Bharat Cess has been made applicable w.e.f. 15-11-2015 and vide notification no. 22/2015 the Rate of Swach Bharat Cess has been caped @ 0.50% of the value of Taxable Services.

 

In light of the above notifications, the revised rates applicable for services rendered by Hotels and Restaurants shall be as below:-

 

SERVICE TAX – The base rate of Service Tax shall continue to be 14% as applicable w.e.f. 01-06-2015. We are noting below the effective Rate of Tax after including Swach Bharat Cess w.e.f. 15-11-2015 on various services:-

 

[NOTE – (a) Swach Bharat Cess has to be separately shown on the face of the Tax Invoice/ Bill; (b) The applicable date for Swach Bharat Cess is 15-11-2015 i.e. all invoices made on 15-11-2015 shall include Swach Bharat Cess]

 

S.

No.

Name of Taxable Service Date from Which Service Tax is Applicable F. Y. 2015-2016 (w.e.f. 15.11.2015)
Without Abatement With Abatement
Service Tax Swachh Bharat Cess Total Service Tax Swachh Bharat Cess

Total

1.

Renting of Rooms

01-05-2011

14 % 0.5 % 14.5 % 8.4 % 0.3 %

8.7 %

2.

Serving Food & Beverages in Air Conditioned Restaurant : Pre-Condition of License to serve alcohol has been withdrawn w.e.f. 10-05-2013

01-05-2011

5.6 % 0.2 % 5.8 % - -

-

3.

Outdoor Catering Service

10-09-2004

8.4 % 0.3 % 8.7 % - -

-

4.

Renting of Immovable Property

01-06-2007

14 % 0.5 % 14.5 % - -

-

5.

Mandap Keeper Service :

Bundled service by way of supply of food or any other article of human consumption or any drink, in a premises ( including hotel, convention centre, club, pandal,shamiana or any other place, specially arranged for organizing a function) together with renting of such premises

01-07-1997

14 % 0.5 % 14.5 % 9.8 % 0.35 %

10.15%

6.

Beauty Parlour & Spa Services

16-08-2002

14 % 0.5 % 14.5 % - -

-

7.

Renting of Motor Vehicles

01-04-2000

14 % 0.5 % 14.5 % 5.6 % 0.2 % 5.8 %

8.

Tour Operator Service

01-07-2000

(a)

Packaged Tour 14 % 0.5 % 14.5 % 3.5 % 0.125% 3.625%

(b)

Sole Arrangement of Booking Accommodation 14 % 0.5 % 14.5 % 1.4 % 0.05 % 1.45 %

(c)

Other Services 14 % 0.5 % 14.5 % 5.6 % 0.2 % 5.8 %

Service Tax Reverse Charge – There is no change in the percentage of deduction of Service Tax under the Reverse Charge Mechanism. The rate at which Service Tax Reverse Charge has to be charged and paid by a recipient of Service in respect of Services provided or agreed to be provided by the the persons noted below are noted in the chart below:-

Sl. No.

Description of a service 1.06.2015 to 14.11.2015  W.E.F.

15.11.2015

1

By an insurance agent to any person carrying on insurance business (100%)

14 %

14.5 %

2

By a goods transport agency in respect of transportation  of goods by road (100%)

14 %

14.5 %

  3

By way of sponsorship to any Body Corporate or Partnership Firm located in a taxable territory (100%)

14 %

14.5 %

4

By an arbitral tribunal;

By individual advocate or a firm of advocates by way of legal services – to any business entity located in the taxable territory (100%)

14 %

14.5 %

5

By Government or local authority by way of support services excluding,-  (1) renting of immovable property, and (2) services specified in sub-clauses (i), (ii) and (iii) of clause (a) of section 66D of the Finance Act,1994– to any business entity located in the taxable territory (100%)

14 %

14.5 %

6

By way of renting of a  motor vehicle designed to carry passengers, to any person who is not engaged in the similar line of business

i) On Non-Abated Value (50%)

ii) On Abated Value (100%)

7 %

5.6 %

 

 

7.25 %

5.8 %

7

By way of supply of manpower including Security Service for any purpose (100%)

14 %

14.5 %

 

8

On Service portion in execution of works contract (50%)

– In case of Original Work – Value of Service is 40%

– In case of maintenance or repairs or reconditioning or restoration or servicing of any goods  – Value of Service is 70%

– In case of Other Works Contract – Value of Service is 70%

2.80 %

4.90 %

4.90 %

 

2.9 %

5.075 %

 

5.075 %

Note – In respect of Service Referred to in para 6, 7 and 8 above, the liability of the Reverse Service Tax arises only if both  the conditions noted below are satisfied:-

i)                     Provider of Service is an Individual, HUF, Partnership Firm including AOP, located in a Taxable Territory;

ii)                   Recipient of Service is a business entity registered as a body corporate located in a Taxable Territory.

9

By any person who is located in a non-taxable territory and received by any person located in the taxable territory (100%)

14 %

14.5 %

10

By a Director of a Company to the said company (100%)

14%

14.5%

11

in respect of  services  provided or agreed to be provided by an Aggregator defined in Rule 2 (aa) of the Service Tax Rules (w.e.f. 01-03-2015)

Liability of Reverse Tax on Aggregator of Service or his representative. (100%)

14%

14.5%

12

By Mutual Fund or Distributor of Mutual Fund or AMC (w.e.f. 01-04-2015) (100%)

14%

14.5%

13

By selling or marketing agent of Lottery Tickets to a Lottery Distributor or Selling Agent (w.e.f. 01-04-2015) (100%)

14%

14.5%

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