[1] The Act is applicable to all the States and Union Territories in India.
The expenditure tax was first introduced by T. T. Krishnamachari (then Finance Minister) in 1957.
It was finally abolished in 1966 after which Chaudhary Charan Singh tried to bring it again in 1979 but failed.
[3] The Act applies to chargeable expenditure provided the following criteria are fulfilled In case of the rooms charges the Assessing Officer of the Income Tax Department has the freedom to decide whether the charges are mentioned in the right manner along with other respective charges such as food, drinks, and other services.
[citation needed] The Expenditure Tax taxable under this Act is charged at[4] In the event that a hotel provides the services mentioned in Sub Clauses (a) to (d) of Clause (1) of Section 5, the amount of Expenditure Tax is to be recovered from the person carrying on the business.