The Expenditure-tax Act, 1987

(1) This Act may be called the Expenditure-taxAct, 1987. (2) It extends to the whole of India except the State of Jammu and Kashmir*. (3) It shall come into force on such date2as the Central Government may, by notification in theOfficial Gazette, appoint

In this Act, unless the context otherwise requires,-- (1) "assessee" means a person responsible for collecting the expenditure-tax payable under theprovisions of this Act; (2) "assessment year" means the period of twelve months commencing on the 1st day of Aprilevery year; (3) "Board" means the Central Board of Direct Taxes constituted under the Central Boards ofRevenue Act, 1963 (54 of 1963); (4) "chargeable expenditure" means the expenditure referred to in section 5; (5) "expenditure-tax" or "tax" means the tax chargeable under the provisions of this Act; (6) "hotel" includes a building or part of a building where residential accommodation is, by wayof business, provided for a monetary consideration; (7) "Income-tax Act" means the Income-tax Act, 1961 (43 of 1961); (8) "person responsible for collecting" means a person who is required to collect tax under thisAct or is required to pay any other sum of money under this Act and includes-- (a) every person in respect of whom any proceedings under this Act have been taken, and (b) every person who is deemed to be an assessee-in-default under any provision of this Act; (9) "prescribed" means prescribed by rules made under this Act; 1[(9A) "restaurant" means any premises, not being a restaurant situated in a hotel referred to inclause (1) of section 3, in which the business of sale of food or drink to the public is carried on andsuch premises, at the beginning of any month, are equipped with, or have access to, facilities forair-conditioning;] (10) "room charges" means the charges for a unit of residential accommodation in a hotel andincludes the charges for-- (a) furniture, air-conditioner, refrigerator, radio, music, telephone, television, and (b) such other services as are normally included by a hotel in room rent, but does not include charges for food, drinks and any services other than those referred to insub-clauses (a) and (b); (11) all other words and expressions used herein but not defined and defined in the Income-taxAct shall have the meanings respectively assigned to them in that Act.

1[3. Application of the Act.--This Act shall apply in relation to any chargeable expenditure-- (1) 2[incurred before the 1st day of June, 2003 in a hotel] wherein the room charges for any unitof residential accommodation at the time of incurring of such expenditure are 3[three thousand rupeesor more per day] and where,-- (a) a composite charge is payable in respect of such unit and food, the room charges includedtherein shall be determined in the prescribed manner; (b) (i) a composite charge is payable in respect of such unit, food, drinks and other services,or any of them, and the case is not covered by the provisions of sub-clause (a), or (ii) it appears to the Assessing Officer that the charges for such unit, food, drinks or otherservices are so arranged that the room charges are understated and the other charges areoverstated, the Assessing Officer shall, for the purposes of this clause determine the room charges on such reasonablebasis as he may deem fit; and(2) incurred in a restaurant 4[before the 1st day of June, 1992.]

Subject to the provisions of this Act, there shall be charged on andfrom-- (a) the commencement of this Act 1[but not after the 31st day of May, 2003], a tax at the rate of2[ten per cent.] of the chargeable expenditure incurred in a hotel referred to in clause (1) of section 3: Provided that nothing in this clause shall apply in the case of a hotel referred to in 3[clause (a) ofsub-section (7) of section 80-IB] of the Income-tax Act during the period beginning on the 1st day ofApril, 1991 and ending on the 31st day of March, 2001: 4[Provided further that nothing in this clause shall apply in the case of a hotel referred to in5[clause (a) of sub-section (7) of section 80-IB of the Income-tax Act, 1961 (43 of 1961) during theperiod beginning on the 1st day of April, 1998 and ending on the 31st day of March, 2008.] (b) the 1st day of October, 1991, 6[but not after the 31st day of May, 1992] a tax at the rate offifteen per cent. of the chargeable expenditure incurred in a restaurant referred to in clause (2) ofsection 3.

For the purposes of this Act, chargeable expenditure,-- (1) in relation to a hotel referred to in clause (1) of section 3, means any expenditure incurred in,or payments made to, the hotel in connection with the provision of-- (a) any accommodation, residential or otherwise; or 1* * * * * (c) any accommodation in such hotel on hire or lease; or 2* * * * * but does not include-- (i) any expenditure which is incurred, or payment for which is made, in foreign exchange3[before the 1st day of October, 1992;] (ii) any expenditure incurred by persons within the purview of the Vienna Convention onDiplomatic Relations, 1961 or the Vienna Convention on Consular Relations, 1963; (iii) any expenditure incurred in any shop or in any office which is not owned or managedby the person who carries on the business of a hotel; (iv) any expenditure by way of any tax, including tax under this Act. Explanation.--For the purposes of this clause,-- (a) expenditure incurred or any payments made in Indian currency obtained byconversion of foreign exchange into Indian currency shall in such cases and in suchcircumstances as may be prescribed be deemed to have been incurred or, as the case may be,made in foreign exchange; and (b) "foreign exchange" and "Indian currency" shall have the meanings respectivelyassigned to them in clauses (h) and (k) of section 2 of the Foreign Exchange Regulation Act,1973 (46 of 1973); (2) in relation to a restaurant referred to in clause (2) of section 3, means any expenditure incurredin, or payments made to, a restaurant in connection with the provision of food or drink by therestaurant, whether at the restaurant or outside, or by any other person in the restaurant, but does notinclude any expenditure referred to in sub-clauses (ii) and (iv) of clause (1).]