Clarification on Restaurant Services

In an important clarification vide Circular No. 173/8/2013 – Service Tax dated October 7, 2013, government has clarified the following queries in respect of exemption provided towards restaurant services vide Notification No. 25/2012 –ST.

Statecommissioneratedivision range jurisdiction
Andhra PradeshGunturAmaravathi DivisionAMARAVATHI CAPITAL CITY RANGEAmaravathi, Pedakurapadu, Thulluru, Tadikonda, Mangalagiri, Tadepalli and Pedakakani Mandals
Andhra PradeshGunturAmaravathi DivisionBHAVANIPURAMEast: Indrakeeladri Range starting from west side of Nagarjuna Street, starting from BhavanipuramGhat Via Crambay road uptoGollapudi Bye pass road. Northside of Tunnel Road commencing from Tunnel Via Sitara Road, Kabela Road, up to Y.S.R. Fly over. Further, Villages of KothuruTadepalli, Ambapuram, P.Nainavaram, Patapadu, Nunna and Jakkampudi.North: Starting from P.Nainavaram Village to Jakkampudi Village.South: South-west side of Nagarjuna Street of Krishna River Bank Via Darga Street, M.K.R. Buildings upto eastern side of Pantakaluva (MustabadKanal).West: Starting from Eastern side of Pantakaluva Via Mail Rai Centre, Gollapudi Bye pass road leads to all Villages upto Jakkampudi Village.
Andhra PradeshGunturAmaravathi DivisionIBRAHIMPATNAMThis Range will have jurisdiction over Gollapudi Paidurupadu, Rayanapadu Villages of Vijayawada Rural Mandal, Ibrahimpatnam, G.Konduru, Mylavaram Mandals, Gampalagudem, Tiruvuru, A.Konduru, Vissannapeta, Reddygudem, and Chatrai Mandals
Andhra PradeshGunturAmaravathi DivisionINDRAKEELADRIEast: East relates to Krishnalanka Range. Starting from North-East Corner Railway Line Commencing from RajIV Gandhi Wholesale Vegetable Market alongside of Railway track to low bridge and there from western way of canal road, through TVS Chalapathi Rao Statue along side of western side of Saraikhana Street and both sides of entire Sivalayam street. From the corner of Bhavannarayana street upto the point where it touches the pulipatIVari street. From TVS Chalapathi Rao statue to Indrakeeladri Hills including both sides of Brahmin Street upto Nehru Bomma Centre, where it touches the K.T.Road. North: The area starts from eastern side of Krishna Main Canal Via canal road(low bridge) along western side of saraikhana street Imdadghar Building and there from both sides of Bhavannarayana street where it touches the pulipatIVaristreet starting from BRP Road cross including bye-lanes where it touches the main bazaar i.e., samarangam chowk area. From southern side of Tunnel to Gollapudi by-pass road upt where it touches the north east corner of crambay road.South: Bank of River Krishna commencing from eastern side of railway track leading to Prakasambarriage and further leads Via Kanakadurgamma Temple where it ends the Nagarjuna Street (Karakatta Sough Road).West: Bhavanipuram Krishna River Ghat Via Nagarjuna Street, crossing NH-9 and leads to eastern side of crambay road (side of H.S.Ameenuddin Baba Darga) where it touches the Gollapudi Bye-pass Road
Andhra PradeshGunturAmaravathi DivisionJAGGAIAHPETThis Range will have jurisdiction over Jaggiahpet, Vastavai, Penuganchiprolu, Nandigama, Chandarlapadu, Kanchikacherla and Veerullapadu Mandals
Andhra PradeshGunturAmaravathi DivisionKRISHNA LANKA1. Eluru Road (Carl Marx Road) Starting from Police Control Room and ending at Besant Road. 2. M.G. Road - Starting from Old Bustand and ending at D.V. Manor Front Line up to Bandar Canal both sides(A1 Convention Centre Road), Brundavan Colony Up to Screw Bridge. 3. Prakasam Road Starting from Swarna Palace back side road to Besant Road. 4. Gopal Reddy Road Starting from Police Shopping Complex (Opp. Old Bustand) to BellapuShobhanadri Statue. 5. Rama Rao Road Starting from Pushpa Hotel Junction ending at Siddardha Arts College (Moghalrajpuram, Prajasakthi Nagar, Kasthuribai Pet, Labbipet, Giripuram, Governorpet, Punnamithota, P.W.D. Grounds, Raithu Bazar and Museum Road). 6. Krishna Lanka Area :-  Purna Chandra Nagar, Satyanarayana Nagar, Geetha Nagar, Balaji Nagar, Rani GariThota, Nehru Nagar, Gowthami  Nagar, Dwaraka Nagar, Chowdari Pet, Brahmaramba Puram, Bhaskararaopet (Including R.T.C. Bustand up to Railway Track).7. Screw Bridge / Krishna Lanka to P.B.Siddartha Arts College
Andhra PradeshGunturAmaravathi DivisionTENALITenali Revenue Mandal and Tenali Municipality Limits; Chebrolu, Ponnuru, Bapatla, Karlapalem, Pittalavani Palem, Kakumanu, Tsundur, Amruthalur, Cherukupalli, Duggirala, Kollipara, Repalle, Nizampatnam, Nagaram, Bhattiprolu, Vemuru and Kolluru Mandals

However, the much awaited clarification failed to enlighten assessees on the following issues:

  1. Sale of food made by Hotels and Restaurants under Take away / home delivery
  2. Food provided under room service. If not clarified, clarification no.2 can be extended by department for the said purpose to say that provision of food by taxable restaurant in room is also service in restaurant (extended service).  However, alternate argument provides that since there is no ambience or service of waiters and other amenities as is provided in restaurant is not available in room services, the equity lies in treating this as sale of food rather than service.

The issues are highly litigative and respite is required in terms of clarification to avoid unnecessary huge demands later on assessees.

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