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Old 11th January 2011, 16:40   #106
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Default Re: Can a customer be charged for Service (at a restaurant)?

I found some views of Jug Suraiya is this link. Interesting read.

Take a tip : Living : Jug Suraiya : TOI Blogs
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Old 11th January 2011, 17:03   #107
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Default Re: Can a customer be charged for Service (at a restaurant)?

Quote:
Originally Posted by selfdrive View Post
I guess you should include McDonalds in the list. In europe at least, going to Mcdonalds is probably one of the last choices while thinking about where to eat. However at least you are not expected to tip there, I hope its the same in McDonalds in India.
We have not reached there yet. In India McDonalds is a popular hit with the kids, mainly due to the toys they offer with the kids meal.

However no tipping is practiced here in KFC / Mc donalds.

In fact if you observe, a KFC/Mc Donald waiter is more busy and has more work to do than a waiter in a regular restaurant who just takes the order and then lazes away till the food comes. Given this it does appear unfair on the tipping rule.
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Old 12th January 2011, 01:04   #108
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Default Re: Can a customer be charged for Service (at a restaurant)?

^^Fast food outlets as well as self service ones usually don't expect tips.

I say usually because there was this guy who I bought a sandwich and coffee from at Atlanta airport and when I waited for my change, slowly counted it out and asked me insolently, You want that?

I smiled, said Yes and walked away.
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Old 12th January 2011, 03:49   #109
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Default Re: Can a customer be charged for Service (at a restaurant)?

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Originally Posted by Fillmore View Post
In India McDonalds is a popular hit with the kids, mainly due to the toys they offer with the kids meal.
It's the same in the USA also. A kid's first visit to McDonald's is like an event in the kid's life. And all subsequent visits also. McDonald's, BK etc are big brands which have a lot of value. Even Hollywood movie stars, presidents, ex-presidents stop occasionally at these places because of the childhood memories.
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Old 14th January 2011, 20:01   #110
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Default Re: Can a customer be charged for Service (at a restaurant)?

Just couldn't resist this short story I saw on my facebook a few minutes ago.

"In the days when an ice cream sundae cost much less, A 10-year-old boy entered a hotel coffee shop and Sat at a table. A waitress put a glass of water in Front of him. “How much is an ice cream sundae?” he asked. “Fifty cents,” replied the waitress. The little boy pulled his hand out of his pocket and Studied the coins in it. “Well, how much is a plain dish of ice cream?” he inquired. By now more people were waiting for a table and the Waitress was growing impatient. “Thirty-five cents,” she brusquely replied.. The little boy again counted his coins. “I’ll have the plain ice cream,” he said. The waitress brought the ice cream, put the bill on The table and walked away The boy finished the ice Cream, paid the cashier and left.. When the waitress Came back, she began to cry as she wiped down the Table. There, placed neatly beside the empty dish, Were two nickels and five pennies. You see, he couldn’t have the sundae, because he had To have enough Left to leave her a tip."
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Old 16th January 2011, 21:16   #111
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Default Re: Can a customer be charged for Service (at a restaurant)?

^^Lovely story. I guess we can all learn from that little boy.
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Old 23rd October 2012, 11:21   #112
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Default Is Service Tax being misused at restaurants?

I got this from a friend recently, after reading it I was worndering if this is true, I have never bothered to check the bill in a restaurant to see if they are actually charging service tax on service charge or the full amount,

Observe that "service tax" is being mis-used and charged to the customers like you and me.


Let me give an example.

Food and Beverage = Rs. 1000.00

Service Charges @ 10% = Rs. 100.00 (10% on the Food and beverage amount)

Service Tax @ 4.94% = Rs. 54.34 (4.94% on F&B + Service Charges)

VAT @14.5% = Rs. 145.00


Total = Rs. 1299.34

As per the definition - "Service Tax can be charged only for the services provided to the customer".

Now, see what is happening here in the abovesaid example.

Service Tax should be charged only on the Service Charges amount i.e Rs.100 and not on the entire amount (1000+100).

In this example, the customer should be charged only Rs 4.94, whereas he has been charged Rs. 49.00 extra.

Where does this money go? Only the restaurant owner and the chartered accountants who work for them know.

So, I have started asking them the questions - and surprised to see the reactions from the famous restaurants. Either they say: Sir we cannot change the format of the bill - so , we will recalculate and tell you the revised amount. You may pay only that.

Sir, you do not need to pay the Service Tax amount itself.

I now have 3 to 4 restaurant bills, for which I have paid only the service tax -on the service charges and not on the total amount.

Every bill must carry the TIN number and Service Tax Number, if they charge it. So, I ask for the Service tax number if it is not available in the receipt that they provide.

We cannot go to any government official and ask them to get this right - because of our system.

Ask for the right tax calculation and pay only the tax which is supposed to be paid. Verify every bills and receipts that you make payment on.
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Old 23rd October 2012, 11:42   #113
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Default Re: Is Service Tax being misused at restaurants?

Quote:
Originally Posted by ssadwelkar View Post
....Service Tax should be charged only on the Service Charges amount i.e Rs.100 and not on the entire amount (1000+100).
.......In this example, the customer should be charged only Rs 4.94, whereas he has been charged Rs. 49.00 extra.
This is very much the general practice followed. Service Tax Valuation principles work quite differently.

The normal rate of ST is 12.36%. Since the bill value includes value of F&B, there is an abatement of 70% (i.e you pay ST only on 30% of the bill value or 4.94% of total bill value as opposed to 12.36 on pure services.)

No doubt there is a certain element of Double taxation, but that's how the tax system works. The ST component would go to the Central Govt. and VAT to the State.

Just take a look at this detailed analysis...

Name:  restaurantservicechargetaxValueaddedtax.jpg
Views: 720
Size:  98.4 KB

Detailed Explanation http://info.akosha.com/consumer-comp...staurant-bill/
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Old 23rd October 2012, 11:47   #114
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Default Re: Can a customer be charged for Service (at a restaurant)?

20% service charge in India is excessive. Adding service to the bill is common practice worldwide. I remember in France, restaurants which did not stated Service Non Compris or something to that effect. I hear 20% may be the norm in the US, but in most of Europe the tip is 10-15%.
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Old 23rd October 2012, 15:35   #115
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Default Re: Can a customer be charged for Service (at a restaurant)?

20% is indeed excessive. Here in bangalore most upscale restaraunts charge between 8-12%.
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Old 23rd October 2012, 17:52   #116
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Default Re: Can a customer be charged for Service (at a restaurant)?

Quote:
Originally Posted by sgiitk View Post
.....20% service charge in India is excessive
Quote:
Originally Posted by ethanhunt123 View Post
20% is indeed excessive. Here in bangalore most upscale restaraunts charge between 8-12%.
Gentlemen, the service charge shown in the above picture is only illustrative.
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Old 23rd October 2012, 18:04   #117
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Default Re: Is Service Tax being misused at restaurants?

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Originally Posted by Warwithwheels View Post
Why would anyone write 10% of 30% of 'something' instead of writing 3% of 'something'?

Last edited by carboy : 23rd October 2012 at 18:06.
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Old 23rd October 2012, 18:20   #118
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Default Re: Is Service Tax being misused at restaurants?

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Originally Posted by carboy View Post
Why would anyone write 10% of 30% of 'something' instead of writing 3% of 'something'?
That is because it is X% of 30%. Here X=10.3; and could (or rather does) change every Budget Day. But really its about introducing complications which improves chances of squeezing 'em pennies.
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Old 23rd October 2012, 18:39   #119
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Default Re: Is Service Tax being misused at restaurants?

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Why would anyone write 10% of 30% of 'something' instead of writing 3% of 'something'?
Guess you have missed this point!

Quote:
The normal rate of ST is 12.36%. Since the bill value includes value of F&B, there is an abatement of 70% (i.e you pay ST only on 30% of the bill value or 4.94% of total bill value as opposed to 12.36 on pure services.)
That 30% Represents the chargeable portion of the bill value.

And the 10% or whatever represents the tax component. For instance, the tax rate at the time of publishing the article would have be 10.30% but now it has been increased to 12.36%. So it should be 30% of Bill Value X 12.36%.

As @recompose has rightly pointed out, the rates are subject to changes independently. Hence the differentiation becomes inevitable.

That said, you can not find this break up in any invoice. It has been posted here for pure academic interest.
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Old 25th October 2012, 15:28   #120
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Default Re: Is Service Tax being misused at restaurants?

Quote:
Originally Posted by Warwithwheels View Post

The normal rate of ST is 12.36%. Since the bill value includes value of F&B, there is an abatement of 70% (i.e you pay ST only on 30% of the bill value or 4.94% of total bill value)
Everything that you have stated is correct, except that there is a typo in the abatement rate which should read as 60%. You pay ST at (40% of 12.36% which is) 4.94% of total bill value.

The final tax rate of 4.94% stated in your post remains unchanged.

Cheers!
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