Your pizza may get cheaper: Service Tax on home deliveries may be cut

In good news for all those foodies who love pizzas delivered at their doorstep, the Finance Ministry may soon clarify that takeaway and home delivered food will not attract service tax.

According to an Economic Times article Finance Minister P Chidambaram feels that takeaways and home deliveries should not attract service tax. The ministry is examining the service tax issue.

The finance ministry’s clarification, if it finally materialises, will also bring relief to the likes of McDonalds, Domino’s and Pizza Hut and other home-delivery chains.

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In the absence of proper clarity on a service tax provision, the industry had made several representations to the government seeking clarity on the issue and even pitching for deferment of the new levy.

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Earlier, the budget 2013-14 had extended service tax to all air-conditioned restaurants, without distinguishing between a restaurant, eating joint, canteen or a mess, which led to the confusion on whether service tax should be imposed on these entities or not from 1 April.

As a result, air-conditioned restaurants began charging service tax from their customers even if food was delivered at home or packed and carried away, notes the ET article.

The finance ministry has now concluded that there is no constitutional provisions forthe tax to be levied on these services.

So, cheer! Your Domino’s Pizza may soon get cheaper.