38.6c New Delhi, India, Friday, March 29, 2024
Judiciary

No Service Tax for Takeaway Orders from Restaurants, Hotels: Madras High Court

By Prachi Jain      11 June, 2021 07:12 PM      0 Comments
No Service Tax for Takeaway Orders from Restaurants, Hotels: Madras High Court

In a notable ruling, the Madras High Court has held that service tax would not be applicable on takeaway in restaurants and hotels. Justice Anita Sumanth passed the order while allowing a batch of pleas moved by popular chain of restaurants, including Anjappar, Thalappakatti and Sangeetha Hotels, challenging the notices issued by the commissioner of GST and central excise demanding service tax for take away orders. 

The bench held that such provision of food and drink takeaway from restaurants would tantamount to only sale and not consumption at the restaurant attracting service tax. 

“In most restaurants, there is a separate counter for collection of the takeaway food parcels. Orders are received either over telephone, by email, online booking or through a food delivery service” said the judge.

Once processed and readied for delivery, the parcels are brought to a separate counter and are picked up either by the consumer or a delivery service. Generally, the takeaway counters are positioned away from the main dining area that may or may not be air conditioned. 

Earlier, opposing the pleas, the department relied on section 66 E (1) of the Finance Act which declares the activity of supply of food or any other article of human consumption or any drink as a taxable service. Thus, there is absolutely no infirmity in the impugned orders that have brought to tax the receipts from parcel sales/ takeaway sales, authorities said.

The department argued that, “The provision of takeaway food and drinks involves the rendition of service and the mode of sale, that is, buy parcels, has no bearing in the matter. The transaction in question should thus be bifurcated into one that involves both the component of sale and service and brought to tax accordingly.”

Refusing to concur, the court observed that not all services rendered by restaurants in the sale of food and drink are taxable and it is only certain specified situations that attract tax.



Share this article:



Leave a feedback about this
TRENDING NEWS

arvind-kejriwals-plea-for-interim-release-rejected-by-delhi-high-court
Trending Judiciary
Arvind Kejriwal's plea for interim release rejected by Delhi High Court [Read Order]

Delhi High Court rejects Arvind Kejriwal's plea for interim release in money laundering case related to liquor policy scam, pending ED's response.

28 March, 2024 10:50 AM
youtuber-strings-plea-against-youtube-accounts-suspension-andhra-pradesh-hc-issues-notice-to-centre-google
Trending Top Stories
BREAKING: Youtuber String’s plea against Youtube accounts suspension: Andhra Pradesh HC issues notice to Centre, Google

Andhra Pradesh High Court issues notice to the Centre and Google LLC on Youtube journalist String’s plea against suspension of its accounts by Google (which owns Youtube).

28 March, 2024 11:26 AM

TOP STORIES

delhi-liquor-scam-court-remands-arvind-kejriwal-to-ed-custody-till-march-28-read-remand-application
Trending Judiciary
Delhi liquor scam: Court remands Arvind Kejriwal to ED custody till March 28 [Read Order]

Delhi liquor scam: Arvind Kejriwal remanded to ED custody till March 28. Court grants agency permission for interrogation in liquor policy case.

23 March, 2024 11:53 AM
sc-dismisses-centres-plea-for-review-of-judgment-directing-ed-to-furnish-written-grounds-of-arrest-to-pmla-accused
Trending Judiciary
SC dismisses Centre’s plea for review of judgment directing ED to furnish written grounds of arrest to PMLA accused [Read Order]

Supreme Court dismisses Centre's plea, upholds judgment mandating Enforcement Directorate to provide written grounds of arrest in PMLA cases.

23 March, 2024 03:14 PM
kerala-hc-to-hear-lesbian-couples-plea-against-forced-conversion-therapy-on-april-9
Trending Judiciary
Kerala HC to hear lesbian couple’s plea against forced conversion therapy on April 9

Kerala HC will hear a lesbian couple’s plea highlighting that one of them was subjected to forced conversion therapy.

23 March, 2024 03:30 PM
how-can-people-be-compelled-to-vote-madras-hc-asks
Trending Judiciary
“How can people be compelled to vote? Madras HC asks

“How can people be compelled to vote?”, the Madras HC queried in a plea asking employers in Tamil Nadu to demand proof from employees of having voted on polling day.

23 March, 2024 05:04 PM

ADVERTISEMENT


Join Group

Signup for Our Newsletter

Get Exclusive access to members only content by email