VAT not leviable on 40% of the restaurant bill, which is subject
to service tax
In the recent decision of the Uttarakhand
High Court, in the case of Valley Hotels & Resorts vs. The Commissioner, Commercial Tax,
Dehradun [TS-129-HC2014 (UTT)-VAT].
The High Court allowed the revision application filed by the assessee and held
that, where the element of service has been declared and brought to tax vide notification
dated 6 June 2012, by which Service tax is levied on 40% of the billed value in
restaurant, no VAT can be imposed thereon.
The issue of double taxation seems to have been addressed and it has been held
that VAT cannot be imposed on that portion of the restaurant bill, which has
already suffered Service tax