05 May 2014

NO VAT on 40% of Restaurant Bill


VAT not leviable on 40% of the restaurant bill, which is subject to service tax

 

 

In the recent decision of the Uttarakhand High Court, in the case of Valley Hotels & Resorts vs. The Commissioner, Commercial Tax, Dehradun [TS-129-HC2014 (UTT)-VAT].


The High Court allowed the revision application filed by the assessee and held that, where the element of service has been declared and brought to tax vide notification dated 6 June 2012, by which Service tax is levied on 40% of the billed value in restaurant, no VAT can be imposed thereon.


The issue of double taxation seems to have been addressed and it has been held that VAT cannot be imposed on that portion of the restaurant bill, which has already suffered Service tax.


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