Is service tax applicable at restaurants?

Service tax is leviable at the rate of 14\% on 40\% of the total bill amount, which excludes the VAT, if any charged by the Restaurant. Food and beverages served at a place not in the restaurant and supplied in any other manners as a part of outdoor catering enjoy a service tax abatement of 60\% of the total bill amount.

Is service tax still applicable in India?

The Goods and Services Tax has reduced the total amount payable for food bills but has left customers confused about the difference between service tax and service charge, the latter being still levied compulsorily in some restaurants. Service Tax, on the other hand, is payable to the government.

Is service fee the same as tip?

A service charge is distributed throughout the restaurant, so that those at the back of the house also get a share. And because it is usually paid by cheque, they have to pay tax on it. A tip, on other hand, is theirs to keep.

How much tax do restaurants charge in India?

GST on Food and Restaurants. GST on food items in India can be 5\%, 12\% or 18\% based on factors such as the establishment type and location of restaurants or food service providers among others. Goods and services tax has replaced the VAT and Service tax regime on food services.

Can you ask to remove service charge?

If you deem service as unacceptable or do not wish to pay you may ask to have it removed from the bill.

How is service taxed India?

Calculation of Service Tax From the 1st of June 2016, service tax is levied at 15\% of the value of taxable services under Section 66 of the Service Tax Act. The 15\% includes 0.5\% Krishi Kalyan Cess and 0.5\% Swach Bharat Cess.

Who is responsible for service tax in India?

the service provider
05. 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.

Why do our restaurant bills have both service tax and service charge?

We always wonder why our restaurant bills have both service tax and service charge, and assume that the restaurants are overcharging us. While service tax is a central government levy, service charge depends on the restaurant. Service charge is nothing but tips that you generally give your waiters.

How much is service tax on food and drinks in India?

For example, if your food and drinks bill is Rs. 2,450, then you should be paying Rs. 142 as service tax at the rate of 5.8\% and not Rs. 355 at the rate of 14.5\%. If any restaurant is found to consider the entire bill for service tax calculation, then you are being cheated.

What is the VAT on restaurant bills in Karnataka?

For example, in Karnataka the VAT on restaurant bills is 14.5\% while in Maharashtra it is 12.5\%. VAT is chargeable on the entire restaurant bill – which means there is a double tax on 40\% of the bill (which pays both service tax and VAT).

Who pays the service tax in India?

The consumer pays the service tax to the service provider while paying the bill (for example, your restaurant bill has a component of service tax). The government in turn collects the tax from the service providers. Get ₹1 Cr. Life Cover at just ₹411/month* *Tax benefit is subject to changes in tax laws. *Standard T&C Apply Get ₹1 Cr.