8/13/2019 Applicability of Service Tax 2012
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FH/1/2012
March 30, 2012
The Managing Director/CEO/Director/Partner/General Manager
All FHRAI Members
CC: All Members of the Executive CommitteeAll Regional
Associations
President FHRAI
Sub: Clarification on Applicability of Service Tax w.e.f.
1stApril, 2012
Dear Sir/Madam,
Greetings from FHRAI!!
This is further to our email of 29th
March, 2012 on the above captioned subject.
As members are aware, in the Finance Bill 2012-13, the rate of
Service Tax has been
increased from 10% to 12%. The net rate of Service Tax would be
12.36% i.e. 12% ServiceTax +3% Cess (2% Education Cess and 1%
Higher Education Cess) and would be effective
from 1stApril, 2012.
Abatement:
The abatement available for hotels (room) is 50% and Restaurants
(A/c Restaurant having
licence to serve the liquor) 70%. It means the hotels having
room Tariff of Rs. 1000/- andabove has to pay the Service Tax on
50% of Room Tariff @ 12.36% (the net rate of Service
Tax comes to 6.18%).This would come into force from 1stApril,
2012.
For A/c restaurants (having Licence to Service the Liquor) the
Service Tax is applicable on
30% of the Bill @ 12.36% (the net rate of Service Tax comes to
3.708%). This would come
into force from 1stApril, 2012.
Members may please recall that Hotels/Restaurants/clubs are
covered under Mandap Keepers
for holding social functions such as marriage, conferences and
seminars where substantial
food is served. It attracts the Service Tax @ 12.36%. There is
abatement of 40%. It meansthe Service Tax is applicable on the 60%
of the total bill or the net rate of Service Tax comes
to 7.416%. This would come into force from 1stApril, 2012.
Please note that the abatement for hotels/restaurants/Mandap
Keepers has been proposed toreduce in the Union Budget 2012-13, as
per details given below:
Service Description Applicable w.e.f. Proposed abatement
8/13/2019 Applicability of Service Tax 2012
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1st April 2012 (reduced) in the UnionBudget 2012-13 (would
not be effective till the
Finance Bill 2012 is
passed)
PresentAbatement
ServiceTax
@12.36%
ProposedAbatement
ServiceTax
@12.36%
Hotels -Room Rent
(Having tariff of Rs.1000/- and above)
50% 6.18% 40% 7.416%
A/c Restaurants(
Having Licence to serve
the liquor)
70% 3.708% 60% 4.944%
Mandap Keeper 40% 7.416% 30% 8.65%
This is for your information please.
With best wishes,
Yours sincerely,
M D Kapoor
Secretary
General________________________________________________The
Federation of Hotel & Restaurant Associations of
IndiaRegd.Office: B-82, 8th Floor, 23 K.G. Marg, New Delhi -
110001Tel: 011-40780780 Fax: 40780777Email:[email protected]
Website:www.fhrai.com
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