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The Legal Affair

Let's talk Law

The Legal Affair

Let's talk Law

No Service Tax on Packaged and Take Away Food : CESTAT

No Service Tax on Packaged and Take Away Food : CESTAT

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), while hearing the Appeal in the case of Haldiram Marketing Pvt Ltd v. Commissioner, Central Goods & Service Tax, held that service tax cannot be levied upon packaged/ take away food items, as it would only amount to sale and not rendering of any services.

The Tribunal was of the opinion that “It is seen that in case of takeaway of food, the Appellant sells the food or packaged items, as chosen by the customer, over the counter and this would amount to sale of goods. Services such as the dining facility, washing area, and clearing of the tables after the food has been eaten are, therefore, not involved.

The activities of preparation of food and packing thereof by the appellant in case of takeaway items are conditions of sale of such food, wherein the intention of the customer is to merely buy such packaged product from the appellant, and not to avail any restaurant services,” the bench observed. 

It is pertinent to note that the Ministry of Finance in February 2011 introduced the service tax for restaurant services and on August 13, 2015, it clarified that the same would not be applicable to “pick-up” or “home delivery”.