NEW DELHI, July 28: The government has decided to levy service tax on outdoor caterers and pandal/shamiana contractors with effect from August 1 next. The tax is being levied on these two services as part of the government's drive to widen tax net.

As far as outdoor caterers are concerned, the levy will apply to services rendered by those who undertake services of supply of food, edible preparations, alcoholic or non-alcoholic beverages or crockery and similar articles or accouterments for any purpose or occasion at a place other than their own.

In respect of this service, the person responsible for collecting the service tax is the outdoor caterer who raises the bill for the services provided to the client. The rate of tax will be 5 per cent. However, where the outdoor caterer provides services of catering including supply of food an abetment of 50 per cent of the total amount charged to the client has been provided for the purpose of computing the service tax.

In case of services provided by outdoor caterers located in the premises of any office, factory and similar establishments and providing services within such premises, an abatement of 80 per cent of the total amount charged to the client has been provided for the purposes of computing the service tax. However, such services provided in academic institutions and medical establishments have been exempted from service tax. Further, catering services provided in railway trains have also been exempted from service tax. In case of pandal or shamiana contractors, the levy shall apply to services rendered by those who undertake services of preparation, arrangements, erection or decoration of a pandal or shamiana. It will also include supply of furniture, fixtures, lights and lighting fittings, floor coverings and other articles .

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.