Service tax abatement on accommodation services provided by Hotel etc and to Restaurants having licence to serve alcoholic beverages

Further amendments in Notification No. 1/2006-Service Tax, dated the 1st March, 2006

New Delhi, the 25th April, 2011

Notification No.34/2011 – Service Tax

G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 1/2006-Service Tax, dated the 1st March, 2006, published in the Gazette of India, vide number G.S.R.115(E), dated the 1st March, 2006, with effect from the 1st day of May 2011 namely:-

2.  In the said notification, in the Table, after S.No.12 and the entries relating thereto, the following S.No. and the entries shall be inserted, namely:-


(1) (2) (3) (4) (5)
“13. (zzzzv) Services provided or to be provided, to any person, by a restaurant, by whatever name called, having the facility of air-conditioning in any part of the establishment, at any time during the financial year, which has licence to serve alcoholic beverages, in relation to serving of food or beverage, including alcoholic beverages or both, in its premises; 30
14. (zzzzw) Services provided or to be provided, to any person, by a hotel, inn, guest house, club or campsite, by whatever name called, in relation to providing of accommodation for a continuous period of less than three months; 50

[F. No. 334/3/2011-TRU]

(Sanjeev Kumar Singh)

Under Secretary to the Government of India

Note.-  The principal rules were notified vide notification no. 1/2006-Service Tax, dated the 1st March, 2006, published in the Gazette of India, Extraordinary vide Number G.S.R. 115(E), dated the 1st March, 2006 and last amended vide notification No.16/2011-Service Tax, dated the 1st March, 2011, published on the Gazette of India vide Number G.S.R.116 (E), dated the 1st March, 2011.

More Under Service Tax


  1. VICKY SINGH says:

    My firm is running   an AC restaurant with  bar in U.P. which  is service tax taxable. The same firm is running a AC RESTAURANT  without Bar in Delhi..We are charging 3.09% service tax at U.P. (after abettment  of 70%). My question is if we don’t avail abbettment at U.P CAN WE ADJUST SERVICE TAX PAID at U.P & DELHI AGAINST RENT ETC WID SERVICE TAX COLLECTED BY US AT U.P ONLY


  2. jayanti khant says:

    which column are required to make service tax liability statement. we have accomodation service, room service and restaurant service

  3. Jagdish Trivedi says:

    @ Tejinder Sharma

    Dear Sir,

    VAT & Luxury taxes are extra taxes which are being recovered by state govt. These are on and above. However, Circular No.139/08/2011 dated 10.05.2011, the dept. of service tax has mentioned that, no VAT or luxury taxes would be counted on declared tariff.

    It means VAT and luxury taxes are extra on which no service tax liability arises.

    Service tax leviable only on declared tariff.

  4. Jagdish Trivedi says:

    @ Rajesh Battu;

    Dear Sir,

    As per new provisions brought in to picture for levying service tax
    Service tax is chargeable only in the case of:
    1. A/c restaurant; and
    2. Providing beverages facility with liquor serving.

    otherwise does not apply with service tax net.

    I think circular no.139/08/2011 dated 10.05.2011 is very much help full to you.

    Pls read it

  5. rajesh battu tax consultant says:

    Dear sir
    question regarding restaurant & bar having air condition.
    Whether assessee has served A/c Room & non A/C room which be seperated while caculating the service tax. It means only service tax payable on A/C room or as well as non a/c room on sale of liquors & foods.
    pls advice me.

  6. Tejinder Sharma says:

    Dear Sir,

    As we know that service tax is applicable on Hotel Rooms /and Ac restaurant from 1st May 2011, we paid Luxury tax 10% on Room and Vat 5% on food

    I want to know wether Service tax will be charged after Luxury tax and vat amount
    or before luxury tax and vat amount.

  7. S.L.GOYAL says:

    With respect to abatement on composite projects involving service and sale of material, abatement allowed is 67% by Service Tax Dept. But sales tax authorities demand sales tax on 80% of the value of such contracts. In my opinion, both authorities should recognise the same ratio of service to material

    I would appreciate if more knowledgeable persons can comment in this matter.

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