The Service Tax Department of Chandigarh vide its letter C. No. ST20/STD/Misc./Sevottam/62/12/4693 dated August 13, 2015 (“the Clarification”) has clarified that free Home delivery/ Pick-up of food is not liable to Service tax. The Department explained the matter further by stating that the dominant intention of such transaction is that of ‘Sale’ as food is not served at Restaurant and no other element of service such as ambience, live entertainment (if any), air conditioning or personalized hospitality is offered. It is further stated that Service tax can be levied if there’s an element of ‘Service’ involved which would typically be the case where food is served in Restaurant. Further, the Department has clarified that the above transaction is not liable to Service tax, being sale in nature, if no amount is charged for such free delivery of food.
Even after issuance of above clarification ,all the service provider like pizza company /McDonald etc are charging service tax on pick up as well as on home delivery services.
- Service Tax levied in case of Take Away Orders even C. No. ST20/STD/Misc./Sevottam/62/12/4693 dated August 13, 2015 (“the Clarification”) has clarified that free Home delivery/ Pick-up of food is not liable to Service tax.
- It is suggested that appropriate explanation be provided in the law itself in respect of leviability of service tax on take away orders/ free home deliveries.