Air conditioned hotels and restaurants attract a service tax on 40 per cent of the billed amount , therefore 14 per cent service tax on food/beverage in air conditioned hotels and restaurants calculated on 40 per cent of bill amount will make Effective service tax rate to be 5.6 per cent

For the service provided by restaurant for the supply of food/drink, service tax is liable only if it is air conditioned. Therefore no service tax is applicable for non AC hotels & restaurants. visit [CAKART provides the best video Lecture and Online classes, coaching for Chartered Accountant CA FINAL, CA Intermediate | CA IPCC, CA Foundation | CA CPT Exams; Company Secretary CS FINAL] to avail discount use my ambassador code :CAKARTAMB1671782 for more article visit https://www.cakart.in/blog http://cakart.in

The finance ministry has clarified that no Service tax will be levied on customers dining in restaurants without air conditioning facility or central heating. Air conditioned hotels and restaurants attract a service tax on 40 per cent of the billed amount , therefore 14 per cent service tax on food/beverage in air conditioned hotels and restaurants calculated on 40 per cent of bill amount will make Effective service tax rate to be 5.6 per cent **SERVICE TAX NOT APPLICABLE FOR NON - AC HOTELS & RESTAURANT.**

Dear Kruthika, As per many clearification given by the ministry Service tax is not applicable on such restaurant eatries etc who's have no AC facility in the premises however vat as per the state policy on product sold is applicable accordingly. so in nut sell Service tax is not applicable on non ac hotel and restaurant. VAT as per the state vat act may be applicable of some product. Any other query feel free to contact us. Writer CA Chitranjan Agarwal