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HindustanTimes Wed,22 Oct 2014

Eating out will cost more from April 1

Sachin Sharma, Hindustan Times  Ludhiana, March 30, 2013
First Published: 22:17 IST(30/3/2013) | Last Updated: 22:19 IST(30/3/2013)

With the central government having imposed service tax on all the air conditioned (AC) restaurants, the central excise department is all geared up to collect the same from the restaurant owners.

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The department has done assessment of the annual business of the renowned restaurant chains and other such joints in areas falling under the Ludhiana commissionerate.

Sources in the department disclosed that the department had sought details about the annual turnover of renowned restaurant chains such as Haveli, Pizza Hut and McDonalds in the region to assess the service tax they should pay in the next financial year.

“The annual turnover of Haveli in the region is about Rs. 10 crore, so they might have to deposit service tax to the tune of Rs. 48 lakh. Similarly, McDonalds have an annual turnover of about Rs. 25-30 crore in the region and service tax payable on this will be about Rs. 1.20 crore. And, the annual turnover of Pizza Hut chain is about Rs. 9 crore and they might have to deposit Rs. 40 lakh as service tax.

To make the restaurants aware of the levying of service tax, the department will also issue advertisements through newspapers. The service tax will be collected from April 1 onwards. Many of the restaurants with AC facility in the region will be under the ambit of the service tax from the next financial year.

Service tax at the rate of 12.36% will be applicable on the 40% of the bill as 60% abatement will be allowed, which means the net rate of service tax comes to 4.944%.

For consumers, the move means paying more for their favourite dishes. The restaurant owners have already done the exercise to hike the prices from April 1.

Owner of Spice Cube restaurant, Inderpal Singh, said that the customers will have to pay about 5% more on the actual bill due to imposition of service tax.

The central government in the budget had brought the AC restaurants under the ambit of service tax. Earlier, only the AC restaurants with the facility of serving liquor had to pay the service tax.

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