The finance ministry has recently declared that the restaurants not having any air conditioner or central heating facility can no longer charge any service tax from their customers. On the other hand, the service tax charged by restaurants providing air conditioners and central heating facilities on the 40% of the total bill amount.

According to the Ministry, after deducting 60% value from the total bill the service tax will be levied on the remaining 40%. This declaration was made to clarify the actual rate of service tax that is to be levied to make sure there is no overcharging.

From June 1, the rate of service tax applicable was changed from 12.36% to 14%. The customers availing the services of air conditioned or centrally heated restaurants will now be required to pay service tax at the rate of 5.6% of the total amount of bills instead of 4.94%.

All those restaurants and food points, either having a central heating system or having air conditioners, that are involved in providing any type of food and/or beverages, operating at any given point of time throughout the year will charge service tax for the services provided by them at the prescribed rate, decided by the Ministry of Finance.