Food served in hotel rooms from their air conditioned restaurants with liquor licences will not attract service tax, the revenue department today said.
“When the food is served in the room, service tax cannot be charged under the restaurant service as the service is not provided in the premises of the air-conditioned restaurant with a licence to serve liquor,” a Central Board of Excise and Customs (CBEC) circular said.
While clarifying the provisions of service tax to be levied on services provided by air conditioned restaurants with licence to serve liquor, the CBEC said the Value Added Tax (VAT) excluded from the taxable value.
Similarly, luxury tax would be excluded in case of short term accommodation service.
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