Restaurant Services Provided in Non-Air-Conditioned Premises Remain Exempt under Mega Exemption Notification: CESTAT

The CESTAT ruled that restaurant services provided in non-air-conditioned premises are exempt from service tax under the Mega Exemption Notification. The bench clarified that mere incidental air-conditioning in certain areas (like kitchens or storage) does not alter the exemption status. The decision reiterates that exemptions must be interpreted strictly based on factual service conditions and premises classification. This order offers clarity for small restaurant operators and F&B service providers regarding legacy tax applicability prior to the GST regime.