No. C4-35025/94/TX.                                          Office of the Board of Revenue (Taxes),

                                                                               Thiruvananthapuram, Dt. 10..04..1995.

CIRCULAR No. 10/95

Sub:   Taxes – Sales Tax Exemption on cooked food and Beverages – certain instructions issued - regarding

Ref:    Govt. Lr. No. 21166/B1/94/TD dated 04..10..94

…..

It has come to the notice of the Board that certain assessing authorities are initiating assessment proceedings against dealers in cooked food and beverages taking the view that the phrase “or any other place” occurring in Entry 12 of the third schedule to the KGST Act, 1963 does not include places outside the premises of hotels and restaurants even if the food is served directly by the hotel/Restaurant.

Entry 12 of the Schedule-III of KGST Act, 1963, reads thus:

“Cooked food including Coffee, Tea and like articles, served in hotel, restaurant or any other place not falling under entry 40 of the first schedule  and when the turnover does not exceed Rs. 5 lakhs”. The words “or any other place” used in the above entry does not mean that the place should be any one of the nature similar to that of a restaurant or hotel. The exemption will be available if the food is served directly by the hotelier or through his employees, irrespective of whether the place forms part of the hotel/restaurant or not.

However, if the food is sold to another for being served in any place, as in the case of transaction between a hotel and Air India or Indian Airlines, the transaction will not be covered by entry 12 of the 3^rd schedule in as held in Luciya Flight Kitchen Vs. State of Kerala (O.P. 9588 of 1990).

All the assessing authorities are therefore requested to bear in mind the above legal position while completing the assessments.

The Deputy Commissioners should acknowledge the receipt of the Circular and obtain acknowledgement from their subordinates.

Sd/-

Secretary (Taxes) – II