The next time you dine at a non air-conditioned restaurant, you will not be charged service tax for your bill. The Finance Ministry on Tuesday reiterated that only air-conditioned or air-heated restaurants are required to pay service tax.
“Restaurants, eating-joints or messes which do not have air-conditioning or central air-heating in any part of the establishment are exempt from service tax,” it said in a statement.
At present, consumers have to pay service tax for services provided by restaurants, eating-joints or messes which have air-conditioning or central air-heating in any part of the establishment at any time during the year in relation to serving of food or beverages.
The statement added that in respect of such restaurants which are required to pay service tax, 60 per cent of the value is to be deducted from the total amount charged while applying the rate, and tax is to be calculated on the balance.
“With the increase in the rate of service tax to 14 per cent (subsuming the Education Cesses) with effect from June 1, 2015, the effective rate of tax will be 5.6 per cent of the total amount charged,” it said.
Prior to June 1, when the rate of service tax was 12.36 per cent (including Education Cesses), the effective rate was 4.94 per cent.
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Soource – TheHinduBusinessLine