I am attaching a copy of a dining bill dtd. 29/08/2015 of Havmor Restaurants Pvt. Ltd., Surat, Gujarat. Some of the points are:
1. There is no registration number of Service Tax and VAT suggesting some dubious activities.
2. VAT has not been charged.
3. Service charge of 10% has been charged. Service charge is not a compulsory chargeable and hence diners have a right to reject payment of service charge depending upon the quality of the services extended by the staff/waiter. The diners in the instant case did not pay service charge as the service was very poor.
High Court of Uttarakhand have already adjudicated levy of VAT on 60% value of food bill and service tax as per Service Tax Act is to be levied on 40% of the food bill. While there is no problem in Service Tax as all restaurants are following the rules but no restaurant seems to be following the same as all restaurants are levying VAT on 100% value of the food.
I would seek views of the CAs as well as Tax Consultants besides all the diners of Restaurants. more
1. There is no registration number of Service Tax and VAT suggesting some dubious activities.
2. VAT has not been charged.
3. Service charge of 10% has been charged. Service charge is not a compulsory chargeable and hence diners have a right to reject payment of service charge depending upon the quality of the services extended by the staff/waiter. The diners in the instant case did not pay service charge as the service was very poor.
High Court of Uttarakhand have already adjudicated levy of VAT on 60% value of food bill and service tax as per Service Tax Act is to be levied on 40% of the food bill. While there is no problem in Service Tax as all restaurants are following the rules but no restaurant seems to be following the same as all restaurants are levying VAT on 100% value of the food.
I would seek views of the CAs as well as Tax Consultants besides all the diners of Restaurants. more
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Dear Mr. Mathur, As I understand the issue is already pending before Competition Commission of India. more
Sep 18
The whole issue of Service Charge needs to be settled by the courts. Somebody has to bell the case, as a public interest issue. more
Sep 18
Yes I agree with Madam Disha. Unless and until the service charge is mentioned in the menu card, the payment of service charge become optional and the diner has a right to refuse to pay. If it is mentioned in the menu card, the amount become payable as the diner has not exercised its option of not to use the restaurant at the time of ordering. In the instant case, the diner or host refused to pay the charge. Another fact is the Govt has already recognised through the Service Tax rules that the food bill contain 60% of the material cost and 40% as the service cost. In such a scenario, there is no point paying again the service charge. We would appreciate if there is no prominent display in the restaurant about charging of service charge extra, the diners may refuse to pay as 40% service charge has already been levied in the food bill. This is just an appeal so that there is a discipline in the restaurant industry for an ethical business practices. more
Sep 18
Service charge means the charge on account of the services offered to us by the restaurant. What if we do not like the services or do not want to pay, but still have to pay just because it is mentioned in the bill? In this case, it should be up to us whether to pay or not, and that is where the concept of giving Tip comes in. At least we can decide the amount that we want to actually pay, along with the regular bill. more
Sep 18
