Government of India
Ministry of Finance
Service Charges Collected by Restaurants/Hotels/Eateries Retained by the Restaurants/Hotels/Eateries and are Not ‘Service Tax’ Imposed by the Government
Some restaurants/hotels/eateries besides charging for the food and beverages are also charging ‘service charges’ in their bills. The proceeds of the ‘service charges’ are retained by the restaurants/hotels/eateries.
Some of the consumers have a misapprehension that these ‘service charges’ are being collected by the restaurant on behalf of the Government as tax.
It is clarified that these ‘service charges’ collected by the restaurants/hotels/eateries are retained by the restaurants/hotels/eateries and are not ‘service tax’ imposed by the Government.
It is further clarified that effective service tax rate in respect of services provided in relation to serving of food or beverage by a restaurant, eating joint or mess having the facility of air–conditioning or central air-heating in any part of the establishment is 5.6% (14% of 40%) of the total amount charged.
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Is the service tax leviable on registered chits installments from June 2015.
please correct it as 40% of 14%
Is the Service Tax leviable on only the 40% of the bill amount or 40% of Bill amt+Service Charges??