Can a restaurant charge service tax?

Can a restaurant charge service tax?

Service charge is not a tax, and therefore, restaurants are not legally bound to enforce it. The amount of service charge a restaurant levies is entirely at its own discretion. You can always move a consumer court if the restaurant charges for service.

Does service charge include GST?

So, as per law, Service Tax has been phased out by GST and customers are not supposed to pay it. However, the Service Charge is still applicable.

Can you take service charge of the bill?

The service charge, usually 12.5\%, is discretionary and quite ‘legal’. If you deem service as unacceptable or do not wish to pay you may ask to have it removed from the bill.

Are business services taxable?

Unlike many other states, California does not tax services unless they are an integral part of a taxable transfer of property.

What is service tax who is liable to pay service tax?

Person liable to pay service tax The tax is normally payable by the service provider. However law empowers the Government to notify a person other than the service provider to pay the service tax.. In some of the cases liability of payment of service tax has been shifted to the service provider.

What is the GST rate for service charge in a restaurant?

Whatever GST rate is applicable on the restaurant, the same rate shall be applicable to the service charge component and no different GST rate shall be applicable. For example: If the restaurant is neither Air conditioned nor liquor is served, then GST rate is 12\%.

Why are we imposing a service charge after GST?

In our restaurant, service charge is compulsory and it’s been conveyed to our patrons. After GST, they are paying less on food. Earlier the total tax levied would amount to 20\% and after GST, it’s 18\%. Most of our customers are happy with this reduced tax but a few still come up to ask why are we imposing a service charge?

Do you have to pay service charge in restaurants?

In some restaurants, as per their policy, service charge is compulsory and therefore their staff often ends up explaining to the customers each time a bill mentions service charge above GST. “In our restaurant, service charge is compulsory and it’s been conveyed to our patrons.

Is service charge included in tax collected by the government?

The amount of Service Charge charged by the restaurant was not included in tax collected by the government. The restaurant business is eligible to opt composition scheme under the GST law. However, the restaurant is required to follow the prescribed composition GST rules.