Must-Know Facts about Taxes You Pay

Consumer Voice - - Service Charge In Restaurants -

Ser­vice tax: It is the tax levied by the govern­ment on ser­vices ren­dered by restau­rants. Ser­vice tax is the same in all states. The ser­vice tax rate at present is 14.5 per cent (in­clu­sive of Swachh Bharat cess). The restau­rant must be air-con­di­tioned for the ser­vice tax. Also, cus­tomers must know that they can­not be taxed on the full bill, but only on 40 per cent of the bill as di­rected. When­ever you see ser­vice tax on the to­tal bill ex­ceed­ing about five per cent, you can ques­tion it. VAT (value-added tax): VAT is state-spe­cific. The rates can be as low as five per cent and as high as 20 per cent de­pend­ing upon the state. More­over, you must know that VAT for food items and drinks (bev­er­ages) are dif­fer­ent. Many ho­tels, restau­rants and night clubs charge a flat rate on the to­tal bill. In such cases, it is good to ask for sep­a­rate bills for food and drinks. This should clearly show the dif­fer­ent VAT for both the items.

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