Service tax..worth sharing

Must Read full :- If we cant change system, at least we should change our self SERVICE TAX At Restaurants - VERY IMPORTANT !!! Interesting. I find restaurant bills often so confusing, ... I just give up and pay the amount shown n the bottom line. Perhaps we shouldn't. Incidentally, I also resent the inclusion of Service Charges in restaurant bills, because it assumes that I was satisfied with the service. Just a matter of principle. Service Charge should be something I leave behind at my personal discretion. I recently demanded that the service charge be removed as the service was non-existent. After a short - very short! - discussion, it was removed. About Service Tax..... Be aware This happened at the restaurant. Let me explain. We had been to several restaurants recently. I observed that"service tax"was being misused in the way it was being charged to customers. Let me give an example. - - - - - - - - - - - - - - - - - - - Food and Beverage = Rs. 1000.00 Service Charges @ 10% = Rs. 100.00 Service Tax @ 4.94% = Rs. 54.34 (on F&B + Service Charges) VAT @ 14.5% = Rs. 145.00 Total = Rs. 1299.34 As per the definition -"Service Tax can be charged ONLY for the services provided to the customer". Now, see what is happening here in the above example. Service Tax should be charged only on the Service Charge amount i.e Rs.100 ONLY, and NOT on the entire amount (1000+100). In this example, the customer should be charged only Rs 4.94, whereas he has been charged Rs. 49.00 extra. Where does this money go? Only the restaurant owner and the chartered accountants who work for them know. · So, I have started asking them the questions - and am surprised to see the reaction from famous restaurants. Either they say:"Sir we cannot change the format of the bill - so , we will recalculate and tell you the revised amount. You may pay only that." OR ·"Sir, you do not need to pay the Service Tax amount itself"!! I now have 3 to 4 restaurant bills, but for which I have paid only the service tax on the service charge and NOT on the total amount. Every bill MUST carry the TIN number and Service Tax Number, if they charge it. So . . . , I ask for the Service tax number if it is not available in the receipt that they provide. As we cannot go to any government official and ask them to get this right - because of our system. Please remember - we cannot change any political leader - but we can change ourselves. If we change ourselves - things will change. Please do share this with every one of your friends and known people. Ask for the right tax calculation and Pay only the tax which is supposed to be paid. Verify every bill and receipt that you make payment on. "Please share if you think its worth"
Replies (1)

 In amendment brought by budget 12-13, the abated value for restaurant services(alongwith supply of food) is 40 %(of 12.36%) of total amount charged.... So, there is no default made by the restaurant... If they want to charge only on service portion, then it shall be taxed @ 12.36%..

 If there is bifurcation in invoice, then the service tax shall be chargeable @ 12.36%......

Even if the amount is bifurcated in invoice, the service tax may be charged on abated value of 4.944% of total amount charged(inclusive of Material & Service charges)

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
12 November 2026
Tax Product Specialist

BharatX.ai

Gurgaon

B.Com

View Details
Company
ARTICLESHIP 22 October 2026
Articleship intern

Srinath Manikanta

Hyderabad

CA Inter

View Details
Company
ARTICLESHIP 20 October 2026
CA ARTICLE

AMKN & CO

Noida

CA Inter

View Details
Company
30 October 2026
Asst Manager Accounts

Goodwin Pumps India Pvt Ltd

Chengalpattu

CA Inter

View Details
Company
Featured ARTICLESHIP 28 October 2026
CA- Inter and Articles

N N V Satish & Co.,

Hyderabad

CA Inter

View Details
Company
31 October 2026
Accountants

sankaran and krishnan

New Delhi

B.Com

View Details
Company
19 October 2026
Accountants/Articles (Freshers/Experienced)

ADY & CO.

New Delhi

Graduate (Any)

View Details
Company
ARTICLESHIP 23 October 2026
Articled Trainee

J Y & CO

Hyderabad

CA Inter

View Details