AAR Maharashtra ruled that an employer's recovery of canteen and transportation service costs from employees constitutes taxable supply under GST. The applicant cannot claim exemption under Notification 12/2017 as transportation services don't qualify as contract carriage. Input tax credit is unavailable for both canteen services (due to restaurant service restrictions) and transportation services (personal consumption under Section 17(5)(g)). GST liability applies only to amounts recovered from employees, not the full service value, as the employer's contribution represents non-taxable perquisites under Schedule III.

The 23rd GST Council Meeting, chaired by the Union Finance Minister, was held on November 10, 2017, in Guwahati. Key discussions included confirming the minutes of the previous meeting, analyzing GST revenue for August to October 2017, and ratifying notifications and circulars issued by the Central Government. The Council deliberated on modifications to anti-profiteering rules, GST rates on various goods and services, and issues related to the GST Implementation Committee's decisions. Recommendations from the Group of Ministers on the composition and tax structure for restaurants were also considered. The Council agreed on several measures to simplify GST compliance, including extending return filing deadlines and addressing IT challenges in GST implementation.

The document addresses various GST-related questions for the hotel and restaurant industry. GST is charged based on the actual transaction value, not the declared tariff, though the latter determines the tax rate slab. Different GST rates apply to accommodation and restaurant services, influenced by factors like air conditioning, liquor licenses, and declared tariffs. The document clarifies that services like room rent in hospitals are exempt, while room upgrades and additional services like extra beds incur GST based on the highest declared tariff. It also discusses the implications of GST on alcohol, input tax credits, and the reverse charge mechanism, particularly for electronic commerce operators.

Constitutional validity of levy of entry tax - power of the state legislature - Article 304(a) of the Constitution - non-obstante clause - Interpretation of word Free used in Article 301 - concept of compensatory tax - separation of power between the Legislature and judiciary on the ground that levy of taxes under Article 304(b) - distinction between a tax and a fee - HELD THAT:- The essential difference between a tax and a fee is that while a tax has no element of quid pro quo, a fee without th... ... ...

In 2011, service tax was introduced for restaurants and hotels, effective from May 1. Restaurants with air-conditioning and a license to serve alcohol are taxed for serving food and beverages on-premises, excluding home delivery or pick-up services. Tax applies to 30% of the gross amount if certain credits are not claimed. For short-term accommodations, tax is levied if the declared tariff is Rs. 1,000 or more per day, applicable to stays under three months. The tax is on 50% of the gross amount if specific credits are not used. Exemptions and conditions have sparked discussions on their legal scrutiny and applicability.

The article discusses the implications of Goods and Services Tax (GST) on the rapidly growing e-commerce sector in India, highlighting recent amendments and their impact. E-commerce operators (ECOs) are now liable for GST on certain services, such as passenger transport and food delivery, which were previously exempt. These changes aim to curb tax evasion and ensure accurate revenue reporting, particularly by smaller restaurants. However, the amendments raise questions about the differentiation in taxation for services provided through ECOs and the potential impact on the market. The article suggests that these changes may conflict with constitutional rights and public interest, calling for further clarification and possible adjustments.

The Finance Bill, 2013, introduced changes to service tax implications for air-conditioned (AC) restaurants. Effective from April 1, 2013, all AC restaurants, regardless of whether they serve alcohol, are subject to service tax. This amendment removed the previous exemption for restaurants with a liquor license. Consequently, consumers will face higher costs due to the inclusion of service tax on AC establishments, including fast-food chains. The law remains unclear on whether self-service, pick-up, or home delivery are taxable. Additionally, the issue of double taxation with VAT persists, and small-scale service providers may qualify for exemptions under certain conditions.

Classification of services - Restaurant-cum- Bar Service - air conditioning facility is provided therein or not - Suppression of facts - extended period of limitation - HELD THAT:- It is found from the records that subsequent to the inclusion of the services provided by the Restaurant having facility of air conditioning in the service tax net, letter dated 7.9.2012 was issued by the department calling upon the appellant to provide details of Registration Certificate, Bar licence., STR/ Income Ta... ... ...

The article discusses the exemption of service tax on restaurant services, specifically focusing on the conditions under which restaurants are subject to this tax. Initially, restaurants with air-conditioning or central air-heating and a license to serve alcohol were taxed. However, since April 1, 2013, only those with air-conditioning or central air-heating are taxed, regardless of alcohol licenses. Non-air-conditioned establishments remain exempt. The article also covers temporary exemptions in Uttarakhand and clarifications issued by CBEC regarding service tax applicability in various scenarios. Legal challenges in Kerala and Bombay High Courts regarding the constitutional validity of such taxes are also highlighted.

The service tax on restaurants, initially applicable only to those with liquor licenses and air conditioning, has been expanded to include all air-conditioned establishments, regardless of liquor licenses, effective April 1, 2013. This change arose from an amendment in the 2013-14 Union Budget. However, a persistent issue remains in the interpretation of the term "establishment," which some authorities apply to entire buildings rather than individual restaurants. This misinterpretation has led to disputes, as seen in cases where non-air-conditioned restaurants within larger air-conditioned facilities are taxed. The government has yet to address this ambiguity despite broadening the tax's scope.

Works contract service - taxability of service component before 1.6.2007 - Larger Bench decision - whether components of a composite transaction amounting to supply of labour/rendition of service(s), under a works contract ought to be classified only under Section 65(105)(zzzza) of the Finance Act, 1994 (the Act) - inserted by the Finance Act, 2007, w.e.f 01-06-2007; or are also comprehended within the ambit of existing (as on 01-06-2007) taxable services such as Commercial or Industrial Constru... ... ...

CESTAT dismissed the appeal in a service tax case where the appellant claimed exemption by arguing the restaurant lacked air conditioning. The appellant stated AC was removed due to insufficient power capacity, but documentary evidence showed the initial liquor license application declared the restaurant as air-conditioned. The State Excise Department confirmed no communication was received regarding AC removal. The tribunal found the appellant's statement was merely to avoid service tax liability without substantive proof. The burden to prove exemption eligibility remained unmet, and the appeal was dismissed following similar precedent involving the same proprietor.

Whether the import fee levied is the levied is the price for parting with the privilege given to the respondent to import liquor into the State and, therefore, the same is within the competence of the State to impose import fee? Whether the imposition of import fee does not, in any way, restrict trade, commerce and intercourse among the States? Held that:- The maxim res extra commercium has no role to play in determining the constitutional validity of a statute. The State, in its discretion havi... ... ...

The discussion addresses whether air conditioning (AC) requirements apply to three types of restaurant services: indoor, outdoor catering, and bundled services. It clarifies that AC conditions apply only to indoor services within establishments like restaurants or hotels. Exemptions exist for services provided in non-AC areas, as per specific notifications. Outdoor catering and bundled services do not require AC. Regarding Cenvat credit, if abatement is availed, credit for central excise duty is not allowed. However, credit for service tax on transportation and other services can be taken if they qualify as input services under Cenvat Credit Rules, 2004.

Gujarat HC held that assignment of leasehold rights of GIDC-allotted industrial land and buildings by lessee to third party constitutes transfer of immovable property, not supply of services under GST Act. Court ruled that leasehold rights represent benefits arising from immovable property including land and constructed buildings, making it a capital asset transfer. Since GST Act does not define immovable property, transfer of such rights falls outside GST scope under sections 7 and 9. Show cause notices and orders imposing GST liability were quashed. Petition allowed.

Refusing to grant registration u/s.12AA - proof of charitable activities - Held that:- In the instant case, it is admitted in the impugned order that the objects of the assessee society are charitable in nature and in absence of pointing out any specific activities of the assessee society which were not genuine, in our considered view, rejection of application for registration u/s.12AA of the Act on the ground of diversion of funds for the benefit of executives of the association in violation of... ... ...

The Krishi Kalyan Cess (KKC) was introduced by the government to fund agricultural and farmer welfare initiatives, effective June 1, 2016. It imposes a 0.5% levy on the value of all taxable services, raising the total service tax rate to 15%. The cess is credited to the Consolidated Fund of India and utilized as per parliamentary appropriation. KKC is not applicable to exempt services or those in the negative list. Input tax credit for KKC is available for service providers but not for manufacturers. The cess's implementation involves specific accounting codes and impacts campaigns like "Make in India" due to increased costs.

CESTAT New Delhi dismissed the appeal regarding service tax exemption for outdoor catering services. The appellant operated a canteen within an air-conditioned hospital, claiming exemption under Serial No. 19 of Notification 25/2012. The tribunal held that since the canteen was an integral part of the air-conditioned hospital establishment and the appellant failed to provide evidence proving absence of air-conditioning in the mess area, the exemption was not applicable. The burden of proof for exemption eligibility rests on the taxpayer, which was not discharged.

The Chandigarh Commissionerate clarified that free home delivery or pick-up of food is not subject to Service tax, as the transaction is considered a sale rather than a service. This decision aligns with the Central Board of Excise and Customs' (CBEC) intention to exempt such transactions from Service tax, as they do not involve service elements like dining amenities. The clarification emphasizes that Service tax applies when food is served in a restaurant, not when delivered or picked up, which instead attracts VAT under state law. This clarification is crucial for consistent application across jurisdictions.

The 23rd GST Council Meeting held on November 10, 2017, in Guwahati resulted in significant changes to tax rates and compliance requirements. The Council reduced GST rates on 233 items, including chocolates and detergents, with 177 items moving from 28% to 18%, and others to lower brackets. The composition scheme limit was raised to 1.50 crore, with a 1% tax rate for manufacturers and traders opting for it. Quarterly GSTR-1 filing was introduced for SMEs until March 31, 2018, and standalone restaurants were taxed at 5% without input tax credit. Notifications for these changes were pending but expected to be effective from November 15, 2017.