Tax pilferage: VAT on food served in marriage parties now
December, 03rd 2007
In order to put a check on pilferage of taxes, excise and taxation officials have now introduced VAT on the food that is served in marriage parties held in city marriage palaces.
According to a recent notification issued by the Deputy Excise and Taxation Commissioner (DETC) M S Kondlus, the host of the party will have to deposit Rs 5,000 as VAT on the food being served in the party. He added, In case the catering is being done by a registered caterer, we will charge VAT from the concerned caterer but Rs 5,000 has to be deposited by the party only in case they are arranging halwais on their own who have no VAT number making it difficult for us to charge tax.
Kondlus said if the host does not want to pay Rs 5,000 VAT, he will have to show us the original bills of the food items purchased for the party.
According to the excise officials, Ludhiana residents throw lavish parties on such occasions in which a variety of food items are served but whenever we ask the marriage palace owner or the host about the caterers, they give us vague replies.While the host says that the palace owner arranged the halwai and hence the bills are not with him, the palace owner in return passes the buck to the host. As a result, the excise teams have not been able to collect much tax from this category.
Kondlus said, Because VAT has been imposed on food items, we thought of imposing a lump sum tax on marriage parties. The host will be charged a penalty if found organising a party without this permit. We are now hopeful of getting good returns from this segment.
While the excise department is expecting to bring in good revenue as the marriage season is in full swing these days, the notification has made the venue owners and the hosts of the parties crying foul. They say that now all of a sudden they have to rush to the Excise Department to deposit the fees. Earlier, only liquor permit was issued by the Excise Department to those who wanted to serve liquor in their parties.