Pandal or shamiana refers to a place specially prepared or arranged for organizing an official, social or business function. Here, social function means ‘marriage’.

However, it can be argued that other functions like thread ceremony, mundane, engagement are ‘religious functions’ and in those cases, the service will not be taxable.

Pandal or shamiana contractor means a person engaged in providing any service, either directly or indirectly, in connection with the preparation, arrangement, erection or decoration of a pandal or shamiana and includes the supply of furniture, fixtures, lights and lighting fittings, floor coverings and other articles for use therein.

For this we provide the following details –

Date from which such service is taxable – 10^th Sep, 2004

Service provider – A pandal or shamiana contractor and A caterer

Service receiver – Any person

Scope of taxable services – Any service provided or to be provided to any person, by a pandal or shamiana contractor in relation to a pandal or shamiana in any manner and also includes the services, if any, provided or to be provided as a caterer.

Exemptions –

Abatement of 30 % of the gross amount charged in cases pandal or shamiana contractor also provides catering services (Notification No. 1/2006 ST dated 1/3/2006) – Where a pandal and shamiana contactor provides services in relation to a pandal or shamiana in any manner, including services rendered as a caterer, service tax shall be paid on 70 % of the gross amount.

This exemption shall apply only in cases where such pandal or shamiana contractor also provides catering services, that is, supply of food and the invoice, bill or challan issued for this purpose indicates that it is inclusive of charges for catering service.

Conditions to be satisfied for claiming above exemption –

• CENVAT credit of duty paid on inputs or capital goods or the CENVAT credit of service tax on input services, used for providing such taxable service, has not been taken under the provisions of Cenvat Credit Rules, 2004.
• Service provider has not availed the benefit under the Notification No. 12/2003 ST, DATED 20/6/2003.

Note: Supply of  furniture, fixture, lights and lighting fittings, floor coverings, PA system and other articles will be taxable only when supply is in connection with ‘Pandal or Shamiana’. In such case, service tax will be payable even if the contractor himself does not supply ‘Pandal or shamiana’, otherwise not taxable.