Service Tax - Free Home Delivery of Food - NRAI seeks clarification from Revenue Secretary
THE Deputy Commissioner of Central Excise, Chandigarh, with the approval of his Additional Commissioner had clarified that in case of the transaction involving Pick-up or the Home Deliveries of the food sold by the Restaurant, the dominant nature of the transaction is that of sale and not service as the food is not served at the Restaurant and further no other element of service which is offered at the Restaurants, be it ambience, live entertainment, if any, air conditioning, or personalized hospitality is offered. The Service Tax can be levied if there's an element of 'Service' involved which would typically the case where food is served in restaurant.
While reporting this in 27 08 2015 , we asked, "Does the CBEC agree with this?"
Now, the National Restaurant Association of India (NRAI) is asking the same question.
The Association has written to the Revenue Secretary that the letter of the Deputy Commissioner has got wide publicity in the media, and has once again created problems for the industry and therefore, the Association has sought a "notification/clarification" on the matter so that the existing confusion can be allayed, and “correct procedures” can be followed by the industry.
In the Scheme of Ease of Doing Business, will the Revenue Secretary/CBEC give a clarification at the earliest?