I went to a restaurant and was charged service tax on the complete bill instead of just the service charge. Curious, I asked the management, but they denied it plainly. I thought I would use the bill to file an RTI legally with some taxation authority. It's not just a matter of a few rupees; it's a matter of being charged illegally, affecting many customers. Please guide me. I don't want to sue the restaurant directly and create a case but rather report this to an authority so they can handle the situation and ensure it doesn't happen again. Correct me if I am wrong in my assumptions. I have heard about similar issues but can't find an authentic statement from the government site about the fact that service tax is calculated on the service charge, not the complete bill.
From India, Gurgaon
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From India, Gurgaon
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I have the bill if needed and any lawyer is free to file a report with copy of the bill. Just ask me.
From India, Gurgaon
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From India, Gurgaon
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Refer to this article to see whether you have been charged extra: [Service Charge, Service Tax and VAT on Restaurant/Hotel Bills!](http://www.jagoinvestor.com/2013/08/service-tax-and-vat-on-restaurant-bills.html) This site does yeoman service to inform and educate people on investments, etc. You can lodge a complaint with a copy of the bill with the local Service Tax Department if you are certain about being overcharged.
From India, Pune
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3180From India, Pune
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Generally, in star hotels or 3-star standalone restaurants, when the bill is raised for the consumption of food and services, it has three components: food charges, service charge, and service tax. Depending on government rules, a few restaurants charge VAT in place of service tax.
Service charge is levied by hotels or restaurants for the maintenance of their facility. Generally, it is not levied by roadside eateries. Nevertheless, their services cannot be equated with star hotels or their equivalent. Whether to levy a service charge or not is at the discretion of the owner of the restaurant or hotel. Customers or consumers of the services are expected to familiarize themselves with the total components of the bill value. Raising objections after availing of the services is legally untenable.
Why raise objections on the service charge alone? You may raise objections on the food charges themselves. However, how much to charge is purely at the discretion of the hotel owner. Customers cannot raise objections to exorbitant charges. Eateries at airports also have astronomical charges. Whether to pay the charges or not is up to the user. Nobody forces him/her to avail of the services.
Because of the word "service," it seems you have confused the concept of "Service Tax" with "Service Charge." The former is levied by the government, and the latter by the owner. Beyond the common word "service," there is no commonality between the two.
When the MRP of a mineral water bottle was Rs 15/-, a customer raised an objection to being charged Rs 50+. The South India Hotels & Restaurants Association (SIHRA) has clarified several times that hotels or restaurants can charge an excess amount to provide services.
Thanks,
Dinesh Divekar
From India, Bangalore
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Service charge is levied by hotels or restaurants for the maintenance of their facility. Generally, it is not levied by roadside eateries. Nevertheless, their services cannot be equated with star hotels or their equivalent. Whether to levy a service charge or not is at the discretion of the owner of the restaurant or hotel. Customers or consumers of the services are expected to familiarize themselves with the total components of the bill value. Raising objections after availing of the services is legally untenable.
Why raise objections on the service charge alone? You may raise objections on the food charges themselves. However, how much to charge is purely at the discretion of the hotel owner. Customers cannot raise objections to exorbitant charges. Eateries at airports also have astronomical charges. Whether to pay the charges or not is up to the user. Nobody forces him/her to avail of the services.
Because of the word "service," it seems you have confused the concept of "Service Tax" with "Service Charge." The former is levied by the government, and the latter by the owner. Beyond the common word "service," there is no commonality between the two.
When the MRP of a mineral water bottle was Rs 15/-, a customer raised an objection to being charged Rs 50+. The South India Hotels & Restaurants Association (SIHRA) has clarified several times that hotels or restaurants can charge an excess amount to provide services.
Thanks,
Dinesh Divekar
From India, Bangalore
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Service Tax.pdf