The Supreme Court has held that restaurants are not subject to service tax for take away food orders and sharing premises with an associated enterprise. While considering a civil appeal, the Supreme Court upheld the ruling of the Customs Excise Service Tax Appellate Tribunal (CESTAT) and dismissed the appeal preferred by the tax department against the ruling of the CESTAT as without merit.
While the issue relates to the pre-Goods and Services Tax era, experts note that the Supreme Court ruling has significant implications for the much debated issue of service tax on takeaway food.