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Old 25th October 2012, 17:37   #121
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Default Re: Can a customer be charged for Service (at a restaurant)?

When there is a service charge in my bill, I don't leave any tip. But I do feel guilty about it. When SC is not mentioned, my tip ranges from 5% to 8% depending on the quality of service. I have also not tipped when I was made to wait too long, waiter messed up my order or the quality of food served was pathetic. It is true that most restaurants in Bangalore levy a service charge ranging from 5% (Rajdhani and like) to 10% (higher end restaurants).

Another thing which I always do is, when we have our Credit/Debit Card swiped, the Merchant copy of the charge slip will have a:-
Amount XXXX
Tip ______
Total ______
I make it a point to dash out the tip and make total the same as amount.


I always thought any product being sold or service being provided can only be charged either VAT (product) or Service Tax (Service). I've not seen VAT and ST being charged together on the same bill. I have mostly seen bills with SC and VAT. Maybe need to notice more keenly.


All this will change once the GST comes into play.
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Old 1st December 2012, 11:19   #122
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Default Re: Can a customer be charged for Service (at a restaurant)?

Quote:
Originally Posted by hrman View Post
.... I've not seen VAT and ST being charged together on the same bill. I have mostly seen bills with SC and VAT. Maybe need to notice more keenly.
This should explain the taxation aspect better:

Can a customer be charged for Service (at a restaurant)?-263643_10151155721452828_427598194_n.jpg

Source
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Old 8th December 2012, 08:49   #123
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Default Re: Can a customer be charged for Service (at a restaurant)?

Service Tax has been clarified by the Govt.

Read about it here : http://www.team-bhp.com/forum/shifti...ml#post2984296
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Old 8th December 2012, 09:48   #124
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Default Re: Can a customer be charged for Service (at a restaurant)?

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Originally Posted by Warwithwheels View Post
This should explain the taxation aspect better:

Attachment 1020523

Source
With due credits to the source, the information published is incorrect. The anomaly was re clarified here. http://www.legallyindia.com/20121105...nterest-notice.

Quote:
Originally Posted by hyd_traveller View Post
Service Tax has been clarified by the Govt.

Read about it here : http://www.team-bhp.com/forum/shifti...ml#post2984296
The above document in DC appears more authentic and coincides with my own reading on the internet and clarification from a very famous law agency. So net net, Hotels with Bar can charge 4.94% ST on total bill excl VAT.

Last edited by hrman : 8th December 2012 at 09:52.
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Old 8th December 2012, 14:38   #125
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Default Re: Can a customer be charged for Service (at a restaurant)?

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Originally Posted by hrman View Post
With due credits to the source, the information published is incorrect. The anomaly was re clarified here. http://www.legallyindia.com/20121105...nterest-notice.

.
So even going by the clarification. The Service Tax amount cannot exceed 40% of the bill amount excluding VAT. That too only if it is an A/c restaurant.

However I don't think anyone uses the 40% rule, it is either 4.94% on Service Charge Or 100% on bill amount.

Moreover the artical ends with "“We will again consult them and if the position is indeed contrary we will issue a clarification,” he said." So until the clarification is out I guess even the 40% is debatable

-Fillmore
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Old 8th December 2012, 14:52   #126
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Default Re: Can a customer be charged for Service (at a restaurant)?

Hi everybody.
I have posted earlier on this subject in a different thread.
Custom and Central Excise has been running a series of ads about the restaurants overcharging.
Here is the link.

http://epaper.timesofindia.com/Defau...&ViewMode=HTML

In future please do remember.
Regards
Mods:I have posted the same link in another thread viz.Important government circulars.Should it be deleted?
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Old 18th December 2012, 19:08   #127
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Default Re: Can a customer be charged for Service (at a restaurant)?

I have now opened a new thread on VAT chargeable by Restaurants. As per the relevant dept., many of the VAT related clarifications here do not look entirely correct. Please carry on the discussions on VAT chargeable by restaurants in the new thread as it looks to be an inimical problem for this industry.
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Old 11th January 2017, 22:44   #128
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Default Re: Can a customer be charged for Service (at a restaurant)?

Consumers need not pay service charge, it is unfair trade practice: Ram Vilas Paswan (Minister of Consumer Affairs).

While service tax is a mandatory component in the restaurant’s bill, service charges by law has always been a voluntary component. This charge, by law, is supposed to be levied only if the customer is happy with the service. The amount so collected goes to the accounts of the waiters which the restaurants deposit at regular intervals.

Hope the Budget-2017 would bring enormous changes to all the various indian structured systems that are yearning for a deeper change since days old.
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Old 12th January 2017, 00:07   #129
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Default Re: Can a customer be charged for Service (at a restaurant)?

Ate out a few times last week due to work and personal commitments, and most restaurants have now resorted to 'politely' mentioning their 'mandatory' service charge.

On inquiring why they insist when it's been declared optional, I was again told 'politely' that it's actually my choice to patronize them that's optional, not the charge.

So much for customer being king.

Last edited by Chetan_Rao : 12th January 2017 at 00:09.
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