Frequently Asked Questions On 'Restaurant Services' Supplied At 'Specified Premises'

The ("CBIC") has issued frequently asked questions (‘FAQ') on the taxation of Restaurant services and has clarified following:

• Specified premises have been clarified as the premises providing ‘hotel accommodation services' where the value of supply of any unit of accommodation is more than INR 7500/- per unit per day or equivalent during the preceding financial year (‘FY').
• The FAQ clarifies that the applicable rate of tax for the ‘Restaurant Services' supplied in ‘specified premises' is 18%1 w.e.f.¹ April 2025, with input tax credit [ITC].
• The change in the definition of the specified premises has been clarified to state that it will no more be linked to the declared tariff but be determined based on the value of supply of ‘hotel accommodation service' provided in the preceding FY.