REDUCED RATE OF SALES TAX ON SERVICES PROVIDED BY CATERERS

Punjab Revenue Authority vide its Notification No. PRA/Caterers.21/2012 dated 25.11.2013 has partially exempted services of standalone caterers, now these services will be chargeable to sales tax @ 5% w.e.f. July-2012 subject to the condition that arears shall be paid within one month of this notification. This notification however, will not be applicable on such supplies where sales tax has been charged on standard rate i.e. 16%. In case of non deposit of arears under this notification, caterer shall be laible to pay tax at the standard rate of 16%.

Benefit of this notification to the caterer shall be optional and subject to the condition of furnishing a certificate from respective trade or business association confirming accuracy of his assessment and payments during the previous financial year.

For the purposes of this notification ‘standalone caterer’ is defined as a non corporate and non-frenchise caterer who is exclusively providing catering including ancillary services. Furthermore, he should not be clubbing, associating or joining the catering activity with any other business activity liable to tax @ 16%.