News shortcuts: From the Courts | Top Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | Professional Updates | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax | PPE Safety Kit SITRA Approved | PPE Safety Kit
Tally.ERP 9: Your one-stop solution from accounting to compliance. Inspired by the way you work, Tally is designed to delight you.
Service Tax »
 How to claim income tax deduction for investments made in April - July 2020
 Home loan moratorium can affect tax benefits
 Income Tax Saving options: Invest in these schemes to save money in last minute
 Wish to save tax? Invest in these schemes before June 30
 Companies will have to reverse tax credit availed on goods destroyed due to Covid-19 lockdown
  Online property tax payment finally gaining ground in city
  Here's how income tax is calculated on your salary
 SBI cuts lending rates, India's tax-GDP ratio falls and more
 Income tax return forms for FY 2020-21 notified
 Deadline extension: A golden opportunity for PPF, SSY investors, but not so glittering for tax savers
 What is digital tax and why is India under investigation?

Here's what Service tax, service charge and service tax number mean for your food bill
April, 10th 2017

How many times have you looked at restaurant bills closely? We just check the items which are being charged, pay the total amount and leave.

If you look at it properly, there are three different things which are important apart from Value Added Tax (VAT) and Cess. They are: Service Charge, Service Tax and Service Tax number.

Department of Consumer Affairs, earlier this year said that the service charges, which restaurants include in addition to taxes, are optional. Simply put, you can refuse to pay service charge if you did not find the service up to the mark.

Service charge is amount charged by the restaurant for providing services to customers. Nowadays restaurants charge a flat 10% service charge on your bill.

The ministry, on January 2, stated that "service charge is payable only on the consumer’s discretion and can be waived off if the customer is not happy with the service."

"Service charge is a completely voluntary levy by restaurants and it it not regulated by the government. Restaurants are at will to levy it. Service charge rates or % are not defined by an law/act," Archit Gupta, Founder & CEO of ClearTax told Zeebiz.

However, service charge and service tax are not to be confused with each other.

Service tax on a restaurant bill has been laid down in the Service Tax Act. Rates and manner of levy, and how to deposit it has been defined in the Act. Service tax returns are required to be filed, the details of which are also defined, Gupta explained.

The service tax remains same in the whole country while service charge depends on the restaurant.

Apart from service tax and service charge, what is important to look at is Service tax number. Service tax number is required for those who deduct & deposit service tax, it is like an identification. Each payer has a number, which is used to deposit service tax and file service tax returns.

If a bill does not include service tax number, the restaurant is not allowed to charge service tax. The number has to be written on the invoice copy.

For instance, your food bill comes to Rs 1,000. The service tax will be applied on 40% of the food bill. Which means, 6% of the total bill will be charged.

Thus, on food bill of Rs 1,000, the service tax amount will be Rs 60. The service tax is charged only on food items and not on alcohol.

If service tax is charged without service tax number, it becomes a non-bailable offence under Section 89 of service tax.

According to Section 89 of Finance Act, the person could be jailed for up to one year or up to two-three years if in case the amount involved is above Rs 50 lakh.

Next time when you visit a restaurant, make sure you check the Food bill properly.

Besides Singapore, India amended bilateral tax treaties with Mauritius and Cyprus in 2016.

Between April and September 2016, India received USD 5.8 billion foreign direct investment (FDI) from Mauritius, USD 4.6 billion from Singapore, USD 1.6 billion from the Netherlands and USD 381 million from Cyprus.

As per the amended Mauritius tax treaty, companies have to pay short-term capital gains tax at half the rate prevailing during the two-year transition period. The full rate will kick in from April 1, 2019.

Short-term capital gain tax is levied at 15 per cent in India while long-term capital gain tax is zero.

Home | About Us | Terms and Conditions | Contact Us | PPE Kit SITRA Approved | PPE Safety Kit
Copyright 2020 CAinINDIA All Right Reserved.
Designed and Developed by Ritz Consulting