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13 Apr 2015

CBEC clarification on Rate of Service Tax & Valuation for Restaurants

To eliminate all ambiguities regarding change in rate of Service Tax, CBEC has issued Circular No. 183/02/2015-ST dated 10th April, 2015 (F. No. B-1/1/2015-TRU). In this circular, CBEC has clarified that new Service Tax rate shall come into effect from a date to be notified by the Central Government after the enactment of the Finance Bill, 2015.

The date will be notified in due course after the enactment.

Team DYN has already circulated similar view vide Do You Know Series-359.

CBEC has also clarified that in Union Budget, 2015 no change has been made in Rule 2C of Service Tax (Determination of Value) Rules, 2006 regarding valuation of services provided in relation to serving of food or beverages by a restaurant, eating joint or a mess. The rate of service tax on the specified portion of the amount charged for such supply which is 40% continues to be 12.36% (including cesses) at present i.e. 4.944 %. The rate of Service tax, as discussed above, will continue unchanged till a date which will be notified in due course.


Now Indirect Tax updates are just one touch away. DYKS Team has launched andriod app "IDT-GST" which can be downloaded freely from play store. By using app you can also access old Do You Know Series.