- Service Tax will not be levied on customers dining in restaurants without air conditioning facility or central heating.
- Even the restaurants that have ACs or central heating will levy service tax only on 40% of the total bill amount.
- Finance ministry also specified, “In case of air-conditioned or air-heated restaurants, 60% of the value is to be deducted from the total amount charged while applying the rate of service tax and tax is to be calculated on the balance 40%”.
- The earlier service tax rate was 12.36% including the education cess. The effective service tax on eating out in air-conditioned or centrally-heated restaurants will be 5.6% of the food bill compared with 4.94%.