WITH THE GST IN THE PLACE THE SERVICE TAXES NO MORE REMAINS MANDATORY. THE RESTAURANTS CANNOT FORCE YOU TO PAY THE SERVICE CHARGES ANYMORE. IF IN CASE THE RESTAURANTS FORCES YOU TO PAY THE SERVICE TAX / CHARGES, WHICH IS An UNFAIR TRADE PRACTICE, YOU CAN APPROACH THE CONCERN AUTHORITIES WITH YOUR GRIEVANCES…
The restaurants have always been applying the service charges over and above all the mandatory government taxes and levies despite the notifications from the government stating that the service taxes are not mandatory, and it cannot be forced on the customer.
Prior to the implementation of the GST (Goods & Service Tax) the Service, tax was applicable but now since the GST is already in the force and the restaurants are collecting it from the customers, there is absolutely no scope for charging the service taxes again.
In this case, the vendor (coffee shop) has charged the GST + Service Tax in the bill which is neither mandatory nor legal charges. According to Consumer Affairs and Food Minister Ram Vilas Paswan, the service tax is not mandatory and can be paid only if the customer is willing to do so.
The department considers that the imposing of the service tax is a deed against the will of the customer, baiting the fundamental rights. According to the sources, the service tax ranges from 5 to 20 per cent and it is added to bills of customers can no more be made mandatory at restaurants. Back then, the Department of Consumer Affairs said that automatic applying of a service fee is the violation of fair trade practices.
Meanwhile, the state government has already issued a circular in this matter in which it has been urged that restaurants and hotels cannot mention the service charges on the bill, and it will depend on the will of a customer to pay the same or not. The happy customer may pay it voluntarily but the unsatisfied customer cannot be forced to pay.
If you take a look at the social media, it is filled with the bills of GST and service taxes. People are openly sharing it on the Facebook, Twitter and some other networks too. In some of the bills, the category of service charges is very prominently mentioned and many people are not aware of the fact that the existing taxation includes Goods as well as service tax (SGST|CGST)
The reports are coming up that despite the fact that service tax and service charges are not mandatory since the inception but the restaurants are exploiting the citizens in the every possible way. Although many people are not aware of this taxation phenomenon and rest are note interested in fighting with the restaurant people.
“A number of complaints from consumers have been received that hotels and restaurants are following the malpractice of charging ‘service charge’ in the range of 5-20%, in lieu of tips, which a consumer is forced to pay irrespective of the kind of service provided to him. The Consumer Protection Act, 1986 provides that a trade practice which, for the purpose of promoting the sale, use or the supply of any goods or for the provision of any service, adopts any unfair method or deceptive practice, is to be treated as an unfair trade practice and that a consumer can make a complaint to the appropriate consumer forum established under the Act against such unfair trade practices. In this context, the Department of Consumer Affairs, Central Government has called for clarification from the Hotel Association of India, which has replied that the service charge is completely discretionary and should a customer be dissatisfied with the dining experience he/she can have it waived off. Therefore, it is deemed to be accepted voluntarily.”
Meanwhile, the Department of Consumer Affairs has asked the State Governments to sensitize the companies, hotels and restaurants in the states regarding aforementioned provisions of the Consumer Protection Act, 1986 and also to advise the Hotels/Restaurants to disseminate information through display at the appropriate place in the hotels restaurants that the ‘service charges” are discretionary voluntary and a consumer dissatisfied with the services can have it waived off.
Hotels/Restaurants should not decide how much Service Charge is to be paid by the customer &it should be left to the discretion of customer.
— Ram Vilas Paswan (@irvpaswan) April 21, 2017
This story is published in the interest of the public and to create an awareness about the fleecing, that is done by many upmarket restaurants. Hence the next time you go to the restaurant please do check your bill for the additional service tax or charges.
Many restaurants and hotels may try to convince you that the taxes go to the government but that is not the truth. The Union Finance Ministry clarified on July 14 that service charge has absolutely nothing to do with service tax. And it does not go into the government coffers; instead, it ends up in the restaurant owner’s pocket.
Have you also come across to any such situation then please share your experience with us, and we shall surely try to publish the same. The consumer needs to know their rights and pays for only for the things that they consume, and rest is not mandatory. In case if the restaurant authorities still forcing you to pay the charges then you can report the same to THE CONSUMER HELPLINE
IMAGE SOURCES: FACEBOOK |