| Q.1 |
What is a Mandap and
who is a "Mandap Keeper"? |
| Ans. |
"Mandap" is
any immovable property as defined in Section 3 of the Transfer
of Property Act, 1882 and includes any furniture, fixtures,
light fittings and floor coverings therein, let out for consideration
for organising any official, social or business function.
"Mandap keeper" is "a person who allows temporary occupation
of a mandap for consideration for organising any official, social
or business function".
The meaning of ‘mandap’ is very wide in its scope and includes
all immovable properties let out for organising social, official
or business functions. It includes places like kalyana mandaps
or marriage halls, banquet halls, conference halls, etc. Hotels
and restaurants providing any such facility within their premises
for organising any social, official or business function shall
also be obviously included in the coverage of Service Tax. Therefore,
the levy of Service Tax is attracted in all these cases.
The definition also includes mandaps, which are located or situated
within the premises of any public place of worship such as temple,
church, etc. and let out on charges. |
| Q.2 |
What is the taxable
service in case of a Mandap Keeper? |
Ans.
|
In case of a Mandap
Keeper, the taxable service are the services rendered to a client
by mandap keeper in relation to the use of mandap in any manner
including the facilities provided to the client in relation
to such use and also services, if any, rendered as a caterer. |
| Q.3 |
What is the value
of taxable service in case of a Mandap keeper? |
| Ans. |
The value of the taxable
service means the gross amount charged by the mandap keeper
from the client for use of the mandap including the facilities
provided to the client in relation to such use and also the
charges for catering, if any.
The Service Tax would be leviable not only on the hire charges
for the mandap but also charges for electricity, whether on
actual basis or otherwise, charged to the customer. The tax
is to be collected on the whole amount even if separate bills
are issued one for the rental and the other for electricity
charges. The mandap keeper may also bill the client for other
services rendered by him such as charges for providing furniture,
fixtures, lighting fittings, vessels, crockery, cutlery, etc.
All these charges are includible in the value of taxable service
for the levy of Service Tax. |
| Q.4 |
What is the value
of taxable service where Mandap keeper is also providing Catering
service? |
| Ans. |
Where a mandap keeper
also provides catering services, that is supply of food, in
addition to the letting out of the mandap and charges the customer
for supply of food, an abatement of 40% of the total amount
charged is provided while computing the value of the taxable
service. This abated value would be the value of taxable service
in such cases. In other words, Service Tax will be leviable
on 60% of the total amount billed in such cases. This abatement
would generally apply in the case of hotels, clubs, also acting
as mandap keepers. |
| Q.5 |
Would sports stadia,
Gymkhana etc. fall within the purview of Mandap ? |
| Ans. |
Yes, they would, if
they let out their premises for a consideration for holding
official, social or business functions. |
| Q.6 |
Is Service Tax to
be paid on the elements of sales tax and expenditure tax etc.
included in the gross bill raised to the client by Mandap Keepers
? |
| Ans. |
No. Since Sales Tax,
Expenditure Tax are statutory levies, they cannot be included
in the value of the taxable services. Any calculation of the
Service Tax has to be on the value of service excluding the
statutory taxes. |
Q.7
|
Is activity of temporary
renting out of studio premises for the purpose of shooting of
Film / T.V. serials liable for payment of Service Tax under
the category of service provided by Mandap Keeper ? |
| Ans. |
No. The activity of
shooting of film/T.V. serial cannot be considered to a official,
social or business function. Hence, the renting out of studio
premises for such activities would not be covered under the
category of services provided by a Mandap Keeper. |
| Q.8 |
Would renting of
Banquet Hall for the purpose of conducting the Seminars and
conferences fall within the definition of taxable service in
case of " Mandap Keepers’ ? |
| Ans |
Yes. The renting of
Banquet halls for conducting the Seminars/conferences would
fall within the ambit of the definition of the taxable service
provided by a Mandap Keeper as such seminars/conferences are
considered as official/business functions. |
| Q.9 |
Is Service Tax payable
by the clubs ,who are making their premises available to their
members only, for organising social function such as marriage,
birth day parties etc.? |
Ans.
|
Yes. The services provided
by Clubs, by way of making the premises available to their members
for organising social functions on payment of fee/ charges,
would fall under the category of service provided by Mandap
Keeper and would be liable to payment of Service Tax. |
| Q.10 |
Do hotels and restaurants
fall within the meaning of the word "Mandap" for the purposes
of levy of Service Tax on services rendered by Mandap Keeper
and is Service Tax attracted when the hotel/ restaurants let
out their halls , rooms, etc. for social, official or business
functions? |
| Ans |
Yes. Hotels and restaurants
would fall into the definition of Mandap if they let out their
banquet halls, rooms, gardens etc. for holding / organising
any marriages, parties, conferences, show and other such social/business
functions. |
| Q.11 |
Is Service Tax attracted
in cases where premises and/ or connected facilities are let
out on rent to clubs and cultural organisations for the purposes
of holdings programmes relating to dance, drama & Music? |
| Ans |
Yes. Renting out hall
etc. for purpose of holding a dance, drama & Music programmes
or competition is chargeable to Service Tax, as the same are
social functions. |
| Q.12 |
Apart from providing
temporary occupation of "Mandap" for any official, social or
business function, if a "Mandap Keeper" provides it for stay
of Baraatis, is he liable to levy of Service Tax on such service? |
| Ans. |
Stay of "Baraatis" is
part of the marriage function, which is a social function, and
hence would attract Service Tax if the mandap is let out for
a consideration. |
| Q.13 |
Whether the charges
of vessels, furniture, decoration etc, provided by the third
party other than the Mandap Keepers are includible in the taxable
value ? |
| Ans. |
The charges of vessels,
furniture, decoration etc, provided by the third party other
than the mandap keepers are not includible in the taxable value
if the mandap keeper is not associated with such supply in any
way since the said facility is not provided by the mandap keeper.
(Authority : Definition of taxable service at clause (m) of
Section 65 (48) of chapter V of the Finance Act 1994) |
| Q.14 |
In summer holidays
or in other holidays the private Schools / Municipal schools
and colleges are letting their schools / college buildings for
marriage functions. Do they come under the Mandap Keepers services
? Are they liable to pay Service Tax ? |
| Ans. |
Marriage function is
also a social function and hence the letting out of school /
college buildings / open land would attract Service Tax under
the category of Mandap Keeper. |
| Q.15 |
Whether donations
accepted / received as consideration for letting out the Mandap
is liable for Service Tax ? |
| Ans. |
Donation is also a form
of consideration for letting out the "Mandap" and, hence would
attract Service Tax. |
| Q.16 |
Whether Cinema Theatres
showing Premier Shows of movies will be liable for payment of
Service Tax under Mandap Keeper Category if the theatre is given
on rent ? |
| Ans. |
Screening of feature
films in cinema theatres is not an official, social or business
function and, therefore, no service tax would be leviable under
the category of "Mandap Keeper" for giving the theatre on rent
for showing premier shows of movies which is a part of the entire
process of making and releasing the feature films in cinema
theatres. |
| Q.17 |
Whether an open land
or ground let out for consideration for organising any social
or official or business function can be considered as a ‘Mandap’
and appropriate tax collected? |
| Ans. |
Even the open land /
ground is to be treated as an ‘immovable property’ as per the
definition given in Sec.3 of Transfer of Property Act, 1882
and hence the above premises let out for consideration also
falls under the category ‘Mandap’ for the purpose of levy of
Service Tax. |
| Q.18 |
Whether the pavillion
owned by a Govt. Undertaking would be covered under the definition
of mandap or not ? Whether such organisation is covered under
the category of Mandap Keeper by virtue of Notification No.19/97-ST
dt. 01.07.97 ? |
| Ans. |
The pavillion owners,
either private or a Govt. under-taking, are liable to pay service
tax under the category "mandap keeper" for hiring out space
/ stall, e.g. a trade fair, to individuals who organise their
business function as per their own requirement. |
| Q.19 |
Whether the services
provided by a Mandap Keeper from a religious place are liable
for Service Tax ? |
| Ans. |
The services provided
by a Mandap Keeper from the precincts of a religious place
are exempted from payment of Service Tax. |
