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Did you know? Food and beverage (F&B) operators who have reached the prescribed threshold of having a total turnover in excess of RM1,500,000 for a period of 12 months must be registered under the Service Tax Act 2018, and they must charge service tax on the provision of taxable services to their customers. The provision of prepared or served food or drinks is a taxable service under Group B, First Schedule of the Service Tax Regulations 2018 (STR).
An F&B operator is defined as:
“Taxable services” means services provided by F&B operator for the provision of:
Definition of F&B Establishment (FBE)
It refers to an area where F&B preparation services are prepared and served under the control of the F&B providers. It can include restaurant entities operating within a hotel or a commercial building such as a supermarket. The FBE is the area under the control and operation of the restaurant’s operator only and not the whole hotel or commercial building.
Places Where F&B Services Need to Be Charged Service Tax
1. Restaurant or similar FBEs
A restaurant is a place where people acquire services for meals that are prepared and served on the premise or to be eaten elsewhere. A place providing food or beverage can be considered a restaurant if it has the characteristics of a place to enjoy food or drink including:
2. Catering Services
Catering services can include the activities of coordination, preparation, delivery, and serving of food and beverage to customers for any event, venue, or other person either within the FBE or outside the FBE.
3. Food Court
A food court is generally a common area within a facility that is set apart for food concessions. The food court operator provides space for F&B customers as well as space for F&B providers to prepare or serve food and beverages. Food court operators usually provide a centralised payment system.
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