1. There is no registration number of Service Tax and VAT suggesting some dubious activities.
2. VAT has not been charged.
3. Service charge of 10% has been charged. Service charge is not a compulsory chargeable and hence diners have a right to reject payment of service charge depending upon the quality of the services extended by the staff/waiter. The diners in the instant case did not pay service charge as the service was very poor.
High Court of Uttarakhand have already adjudicated levy of VAT on 60% value of food bill and service tax as per Service Tax Act is to be levied on 40% of the food bill. While there is no problem in Service Tax as all restaurants are following the rules but no restaurant seems to be following the same as all restaurants are levying VAT on 100% value of the food.
I would seek views of the CAs as well as Tax Consultants besides all the diners of Restaurants. more
We would appreciate if there is no prominent display in the restaurant about charging of service charge extra, the diners may refuse to pay as 40% service charge has already been levied in the food bill. This is just an appeal so that there is a discipline in the restaurant industry for an ethical business practices. more