Sale of food items by Take Away Not liable to Service Tax: CESTAT

The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has ruled that the sale of food items by take-away outlets is not liable to service tax. This decision was made in the case involving a take-away food outlet that was charged with service tax on the sale of food items. The tribunal held that the sale of food items by take-away outlets constitutes a sale of goods and not a service, and therefore, it is not subject to service tax. The ruling clarified that the essential character of the transaction is the sale of food, which falls under the category of goods, and not a service. This decision provides significant relief to take-away food outlets, which were previously subjected to service tax on their sales. The tribunal’s ruling is expected to have a broader impact on the food and beverage industry, providing clarity on the tax treatment of take-away food sales and ensuring that such transactions are not subjected to service tax.