Queency Jain –
The Madras High Court has directed that no income tax will be charged on takeaway orders or parcels by the restaurants and hotels.
The direction comes after various hotels namely, Anjappar, Thalapakatti and Prasanam filed the petition questioning the orders of Commissioner of GST and Central Excise Department under Section 66E (1) of Finance Act, demanding service tax on takeaway orders.
The Court stated that in most of the cases, there exist separate counters for takeaway orders wherein the orders are positioned far away from the area where food is served or people are offered dining.
Furthermore, not all services provided by the restaurants and hotels in the form of sale of food and drinks are taxable. There are only a few services that attract tax.
In conclusion, Justice Anita Sumanth ordered that no service tax can be imposed on takeaway orders and parcels.