Curious About Service Tax Rates on Food? Let's Discuss the Details Here

Dear All,

Could anyone tell me what is the rate of service tax on food items? Also, please inform me about the percentage of service tax and educational cess.

Thanks & Regards,
Debajyoti

Hi,

I have a bill with me where both VAT at 12.5%, Service charge at 10%, and Service Tax at 7.42% have been charged on food items. Apart from this, 12.36% of Service tax is charged on non-food items. I need to know the Service Tax rate and educational cess on food items.

Thanks,
Debajyoti

Dear Rajeev,

At present, I do not know the tax rates, but I think the following article may interest you: http://allindiantaxes.com/f.%20no33297-tru.php. Although it is not clear which food items and at what point of incidence you have been charged the service tax. Without the whole thing being clear, it is not possible to comment on the applicability of service tax. Let us know the situation; it will be a learning factor.

Regards,
ms14

Hi,

The buying and selling of food items is covered under the service category (outdoor caterer). Being an outdoor caterer, you are liable to charge VAT as well as service tax. The effective figures are as follows:

- 100 pastries @ Rs. 50 = Rs. 500.00
- Add: VAT 12.5% (Haryana) = Rs. 60.00
- Add: Service tax 12.36% = Rs. 62.00
- Less: Abatement of 50% of service tax as per notification 20/2004 = Rs. 31.00
Total: Rs. 591.00

Thank you.

Hi Debjyoti,

I'm Dharmesh, and I'm involved in facility management services located in Mumbai. The service tax is 12.36%, which includes the education cess. I haven't mentioned the breakup; please note this.

Thanks,
Dharmesh

To my knowledge, the service tax currently stands at 12.36%, which includes the education cess. Additionally, there is an education tax of 2% charged on the total income tax payable by an individual.

Dear Mr. Sharma,

Yes, the current service tax slab is 12.36% (12% is service tax + 3% {of 12%} is educational charge). I agree with Ms. I have not clarified the term food item. Here it is---

A few days back I booked a venue (in Delhi) for some official party. I have received the bill. In the bill, they have charged me 12.5% VAT & 7.42% Service tax on food items. Apart from this, they have also charged me 12.36% Service Tax on non-food items. As far as non-food items are concerned, I have no problem with the calculation of Service tax. I am a little confused about the calculation of ST on food items. Can anyone tell me how (what is the calculation) they have charged me 7.42% of ST?

Thanks & Regards Debajyoti

Dear Mr. Sharma,

Yes, the current service tax slab is 12.36% (12% is service tax + 3% {of 12%} is educational charge). I agree with Ms. I have not clarified the term food item. HERE it is---

A few days back, I booked a venue (in Delhi) for an official party. I have received the bill. In the bill, they have charged me 12.5% VAT and 7.42% Service tax on food items. Apart from this, they have also charged me 12.36% Service Tax on non-food items. As far as non-food items are concerned, I have no problem with the calculation of Service tax. I am a little confused about the calculation of ST on food items. Can anyone tell me how they have charged me 7.42% of ST?

Thanks & Regards,
Debajyoti

Hi,

It is argued that supply of food is termed as a “deemed sale” which is charged to sales tax by the State Governments and as such it is not liable to service tax. :)

In this context it may be clarified that deeming the supply of food in a restaurant as a sale does not in any way bar the levy of service tax on the service provided by outdoor caterers which is primarily a tax on service rendered by an outdoor caterer. :roll:

It is pertinent to note that the service rendered by outdoor caterers is clearly distinguishable from the “indoor” services rendered in a restaurant or hotel. In the case of outdoor catering service the food/eatables/drinks are of the choice of the person who partakes of the service; s/he is free to choose the kind, quantum and the manner in which the food is to be served. As against this, while eating in restaurant or hotel where the customer's choice of the food is bound by the menu card.

Again in the case of outdoor catering the customer is at liberty to choose the time and place where food is to be served. In the case of an outdoor caterer the customer negotiates each element of the catering service, including the price to be paid to the caterer. Outdoor catering has an element of personalised service provided to the customer the service element is the more weighty, visible and predominant aspect in the case of outdoor catering.

It may also be clarified that sale of food across the counter, as in fast-food joints/restaurants or serving of food in a restaurants/hotels do not fall within the ambit of outdoor catering. Nor does mere free delivery (or delivery at a nominal cost to cover transport charges) of food by a fast food joint, restaurant etc. shall be subject to service tax as in such cases there is no service element and only a mere sale of food.

You can also get more info. at

http://servicetax.gov.in <link updated to site home>