In a recent ruling, the Chandigarh Bench of Customs, Excise and Service Tax Tribunal (CESTAT) held that conference halls for meetings and other functions were a complementary service and is not liable to Mandap Keeper Service tax.
The bench observed that the respondent hotel did not charge separately for the conference hall which was provided as a complementary service.
Briefly stated the facts of the present case are that the Respondent is engaged in the business of running and operating luxury hotels and was duly registered with jurisdictional service tax authorities under various categories inter alia “Mandap Keeper Service” specified under Section 65 of Finance Act 1994.
The Respondent filed a reply to the show cause notice and after considering the submission of the respondent, the adjudicating authority passed the order in original and dropped the proceedings initiated against the respondent
The authority observed that the use of the conference hall was merely a complimentary service offered by the respondent and the consideration was charged for the room booking basis per room/ per night hence, the respondent was not providing “Mandap Keeper Service”.
The representative of the department asserted that the Commissioner has wrongly dropped the demand on the ground that the primary business of the hotel is to provide accommodation to their clients through room renting along with the providing of food facilities through restaurants or through room service and such activities of hotels and restaurants do not fall within the ambit of “Mandap” falling under Section 65(105)(m) of Finance Act.
According to the respondent’s representative, no separate payment was made for the complimentary services, and they were offered without charge.
The bench observed that it is unambiguous that no separate consideration was charged for the provision of conference facilities based on the breakdown of the corporate billing that the respondent provided on the record.
Further observed the case Dukes Retreat Ltd. vs. Commissioner of Central Excise, Pune, in which the tribunal has held that the complementary services provided free of cost will not be taxable under “Mandap Keeper Service”. Thus the bench upheld the decision of the adjudicating authority.
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