OFFICE OF THE COMMISSIONER COMMERCIAL TAXES,

JAMMU & KASHMIR GOVERNMENT,

EXCISE & TAXATION COMPLEX,

RAIL HEAD, JAMMU-180012

Clarification No. 05 of 2006-07 Calri/06-20/609-20 Dated 27th June 2006

It has been brought to my notice that there is some misgiving among a section of the dealers pertaining to Entry No.4 of Schedule "B" annexed to Notification SRO-86 dated 30th March, 2005. The Entry is being inter preted by some dealrs to mean that 4% tax is leviable on food items including cooked food, food preparations and beverages being served in or supplied from Hotels. The issue therefore needs to be clarified.

Notifiation SRO 86 dt. 30/03/2005 has been issued under the provisions of The Jammu & Kashmir General Sales Tax Act, 1962 and is meant to cover only those goods which have been kept outside the purview of The Jammu and Kashmir Value Added Tax Act, 2005, Section 103 of The Jammu and Kashmir Value Added Tax Act, 2005, pertaining to "Exclusion and Savings" emphatically and unequivocally in sub-section (1) states-

"With effect from the appointed day, The Jammu & Kashmir General Sales Tax Act, 1962 (Act. No.XX of 1962) shall cease to have application in respect of goods to which the Act applies."

Which means that The Jammu & Kashmir General Sales Tax Act, 1962 shall have no jurisdiction over the goods which are covered under The Jammu and Kashmir Value Added Tax Act, 2005 w.e.f. 01/04/2005 and since The Jammu and Kashmir Value Added Tax Act, 2005 applies to "all foods items including Cooked foods, food preparations and beverages served in or supplied from Hotels" as such it is clarified that VAT @ 12.5% is chargeable on all kinds of food items including cooked food, food preparations and beverages served in or supplied from Hotels w.e.f.. 01/04/2005.

Sd/-

(Bashir Ahmed)IAS

Commissioner Commercial Taxes