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The provision of food and drink to be taken-away in parcels by restaurants tantamount to the sale of food and drink and does not attract service tax.

Leviability of Service Tax on Take away Food/Parcel –––– The petitioners registered for providing restaurant services, outdoor catering services and mandap keeping services. Audit was undertaken in all the cases and the conclusion arrived at by the Department was that service tax had not been discharged in relation to ‘take away/parcel services’ for various periods upto June, 2017. The petitioners submitted that there is no liability for sale of food at the take-away counter or by parcel and the sale of packaged food constitutes pure trading activity and there is no component of service involved therein. In terms of definition of ‘service’ under Section 65B(44), which excluded the transfer of title in goods by way of sale. The court observed that all services rendered by restaurants in the sale of food and drink are not taxable. The sale of food and drink simplicitor, services of selection and purchase of ingredients, preparation of ingredients for cooking and the actual preparation of the food and drink would not attract the levy of tax. Only those services where the food and drinks are collected for service at the table till the raising of the bill, are covered. The provision of food and drink to be taken-away in parcels by restaurants tantamount to the sale of food and drink and does not attract service tax under the Act. Held that:- The Hon’ble High Court allowed the Petitions quashed the impugned orders.
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