I want to know that what registrations and taxation things one need to know and follow to start tiffin delivery service in bangalore as an individuals. Like VAT/Service tax/ food sercurity etc etc

Posted 2 years, 10 months ago by Ashish bansal

Service Tax: Service tax is applicable on restaurents providing services using AC. Service tax is charged on service part and not on sell of goods. In your case since food is only delivered service tax liability does not arise. In case of home deliveries, there’s no service or it is incidental to the actual sale of food.

In your case service tax does not apply. (Its assumed that food is cooked also by same firm delivering the food).

If food is also cooked by the delivery firm in that case VAT becomes applicable. You can opt composition scheme for vat charging.

You hvae to obtain a license from BBMP for serving food and its probably called Food license along with trade license.

Posted 2 years, 10 months ago by CA Pulkit Sharma

Pulkit sir has suggested very well. I think ashish has understood.

Posted 2 years, 10 months ago by CA AJAY MAURYA

Almost satisfied by your answer.. but what about the service of delivering at home isnt it a part of service.? and isnt the service of delivdry f food comes under catering service.. as service tax has some points on catering business...as taxablity over 40% of value.

Posted 2 years, 10 months ago by Ashish bansal

The firm is engaged only in delivery or is also making the food?

If food is not cooked by same firm then service tax is applicable and you can register under most suitable head such as business auxillary services (Foodpanda kind of service)

However if food is delivered without charging anything, ie free home delivery then service tax does not arise.

Posted 2 years, 10 months ago by CA Pulkit Sharma

Both..Its a proprietry business. the guy with the help of his staff witll make food and will deliver it to different people around his area.

Posted 2 years, 10 months ago by Ashish bansal

and for sure there is no food delivery charges.. as they are charging for food only.. delivery is attached to that

Posted 2 years, 10 months ago by Ashish bansal

Ok so its not only a delivery business. Service tax is not applicable since delivery is not a serivce provided but its incident to the actual sale of food (On sale of food service tax is not applicable).

Posted 2 years, 10 months ago by CA Pulkit Sharma

Ok and what will be the rate of VAT for sale of food?

Posted 2 years, 10 months ago by Ashish bansal

Regarding VAT you can opt composistion scheme with 4% without benefits of input credit.

Posted 2 years, 10 months ago by CA Pulkit Sharma

I had one basic question if any one could answer it , i would be glad.

There are two gaints Pizza Hut and Dominos operating in the pizza market. Both are registered under service tax and VAT Respectively.

The order value for ordering at the counter and ordering take away / delivery is almost the same in both these vendors. The taxes i,e Service tax is levied with abatement and VAT is levied at the rates as applicable 14.5%.

Now the question is when price charged for goods sold at counter is same as that of delivery, the service tax is to be levied on the service value rendered. If such services are rendered for consideration other than monetary consideration the mode of valuation is specified under service tax rules.

No company shall incur cost of transportation of food supplies free of cost to the end customer, the price always is included in the price of the goods sold.

Is these multinational gaints overcharging customers who order on the counter or is that the service costs on delivery is not subjected to tax...!



CA.Sundeep Kamath

Posted 2 years, 10 months ago by CA Sundeep Kamath

Service charges are free of cost. Cost is not charged to customers for service. You get same price whether ordered or consumed over the counter. Since delivery is part of sale and not a seperate sell made, service tax is not chargeable. you can debate on that discount should be provided for Pizza consumed in the store itself since delivery cost is not incurred.

We need to have access to their books to understand the cost structure. But, I am sure they do not charge for delivery and also service tax is not charged on delivery.

Posted 2 years, 10 months ago by CA Pulkit Sharma

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