In a major relief to PVR, the Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that no service tax on sale of packed or reheated food in cinema halls as there is no service element involved.
The bench of Binu Tamta (Judicial Member) and P.V. Subba Rao (Technical Member) has observed that cinema hall’s main purpose is to enable the public to view the movie, however to make it more enjoyable and convenient they provide a separate counter outside the movie hall but within the complex where the viewers can themselves go and buy some food or drinks, which implies that the later facility is only incidental and hence cannot be treated as a service within the definition of “service” under the Finance Act, for the charge of service tax.
The appellant, PVR has raised the issue of whether the supply of food and beverages in the cinema complex falls within the definition of ‘service’ and ‘declared service’ in terms of Section 65B(44) and Section 66E of the Finance Act, 1994.
The issue is no longer res integra and has been decided in the case of the appellant themselves in the case of M/s. PVR Limited, Shri Nitin Sood, Shri Ajay Bijli and Shri Brijesh Arora Vs. CST, New Delhi holding that the supply of food and beverages in the cinema hall does not involve any service element and is merely a transaction of sale. The period involved in the order was from 2013-2014 to 2015 and the present appeal involves the subsequent period from 2015-16 to June, 2017.
The tribunal allowed the appeal.
Case Details
Case Title: M/s. PVR Limited Versus Principal Commissioner of Goods & Service Tax & Central Excise
Case No.: Service Tax Appeal No.50250 of 2021
Date: 26.03.2025
Counsel For Appellant: V. Lakshmikumaran and Ms. Shagun Arora and Ms. Shrishti Yadav
Counsel For Respondent: Jaya Kumari
