Food and beverages served at swimming pool side in a hotel will attract service tax, the Finance Ministry has said.

"Services provided by specified restaurant in other areas of the hotel are liable for service tax," said the Central Board of Excise and Customs (CBEC) while clarifying doubts regarding the applicability of the levy on restaurant service.

In a hotel, if services are provided by a restaurant in other areas like swimming pool or an open area attached to the restaurant will attract the service tax, it said.

The CBEC, responsible for administration of indirect taxes, further said that service tax is not applicable on goods sold on MRP (maximum retail price), like water bottles, in restaurants.

"If goods are sold on MRP basis...they have to be excluded from total amount for the determination of value of service portion," it said.

It further clarified that services provided in relation to serving of food or beverages by a restaurant, eating joint or mess, having the facility of air conditioning or central air heating, attracts service tax.

However, services provided in non-air conditioned restaurants are treated as "exempted service".

In restaurants, service tax is charged at the rate of 12 per cent plus cess on 40 per cent of the food bill.