Look before you eat
City hotels, restaurants levying service tax on bills
By : s.n.v sudhir
Update: 2015-05-16 06:31 GMT
Visakhapatnam: Dining out has become a little more costly in Vizag as some restaurants and star hotels have started collecting ‘service charge’ apart from the mandatory service tax and VAT on every food bill. While the rates on the menu are generally included in the service these restaurants provide, they have recently started collecting ‘service charge’ leaving those who dined, in confusion while paying the bill.
“I was surprised to see service charge on the bill leaving me confused whether to give a tip to the waiter or not. Earlier, it was not the case in the same restaurant when I had dinner a few months ago,” said Ravichand who visited a popular restaurant at Jagadamba Junction.
The tax officials say that there is no such provision in their mandate to ask the restaurants to stop collecting the service charge. However, they ensure these restaurants collect service tax and pay them promptly. “We only check that whether restaurants and hotels are collecting service tax properly and paying us promptly or not. Service charge is the sole discretion of the respective hotel or the restaurant,” said a senior official of Vizag I central taxes commissionerate.
Hotel and Restaurant Association of AP (HRAAP), Vizag chapter head, P.C. Rao, of Four Point Sheraton, has confirmed that some hotels are collecting service charge.
“We do not collect service charge separately at our hotel. It’s all included in the prices of the food items on the menu. However, some hotels and restaurants in the city collect service charge. It is better to take a close look at the bill and if service charge is seen it is better to avoid giving tip to waiters as service charge collected will be shared among the hotel staff. It depends upon the respective hotels’ policy whether to collect service charge or not,” added Rao.