Whether vat is to be collected on service charge??
This query is : Resolved
06 June 2013
In hotel industry service charge is collecting which is not a statutory compilance. Whether vat is to be collected inclusive of service or excluding the service charge
06 June 2013
VAT is to be collected EXCLUSIVE of service tax since VAT is levied on the sale of goods only.
06 June 2013
My doubt is not about service tax, it is about service charge
06 June 2013
VAT is to be collected INCLUSIVE of 'service charges' levied in the sales bill.
Tushar Desai
(Expert)
06 June 2013
It is not specifically covered under a section. As Mr Warrier said above, "VAT is levied on the sale of goods".
In this particular case, SERVICE CHARGE (Not Service Tax) is charged by the Restaurant (of the Hotel) for various services provided to customers. It is just an extra charge up and above menu price. So, this charge is to be added up to the actual "Sale of Goods".
In this particular case, SERVICE CHARGE (Not Service Tax) is charged by the Restaurant (of the Hotel) for various services provided to customers. It is just an extra charge up and above menu price. So, this charge is to be added up to the actual "Sale of Goods".
Tushar Desai
(Expert)
06 June 2013
nowadays, hotels have started collecting money this way. I had recently had a dispute at a famous hotel in Daman in a very similar situation. I tried to frame them but could not do it in legal way.
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