No Service Tax on catering at Railway stations
And who do you think is giving this clarification? The Railway Ministry!. They have suddenly become Service Tax experts. The latest clarification from the Railway Ministry says that,
Though service tax has been imposed on mobile and on-board catering services of Indian Railways, it is clarified that service tax has not been imposed on catering services from static catering units on Railway premises.
But why?
The Act defines out door caterer as ,
“outdoor caterer” means a caterer engaged in providing services in connection with catering at a place other than his own but including a place provided by way of tenancy or otherwise by the person receiving such services;
Then who is a caterer? The Act defines that too.
"caterer" means any person who supplies, either directly or indirectly, any food, edible preparations, alcoholic or non-alcoholic beverages or crockery and similar articles or accoutrements for any purpose or occasion;
Interestingly there is an exemption Notification No. 1/2006 which mentions, “This exemption shall apply in cases where,- (i) the outdoor caterer also provides food; and…” . What else is he supposed to provide?
Maybe if catering is provided by Railways in its own premises, there would be no tax, but that logic would apply to catering in the trains too if the food is supplied by Railways. Very soon the Railways will find that interpreting tax laws is not all that simple and straight like running trains. Trains most often run on tracks, but tax has no tracks at all.