Service Tax on AC restaurant
1. As per Service Tax rule, in an AC restaurant, 40% of the food cost is considered as service charge. So service Tax = 40% of the food cost X 14% service tax. Whereas for claiming of VAT, 100% is considered as food cost and accordingly VAT charge. That means total tax taken on 140% of the food cost. If the service part is 40% of the food cost, why VAT will not be charged on 60% of the food cost instead of 100%?
2. If the food is purchased as a parcel item and taken away from the restaurant, why should service tax to be given (as the restaurant service has not been used)? Whereas most of the restaurent charge Service tax for both parcel item as well as served item.
3. Whats about non-AC restuarant? Is it clearly defined? more