Service Tax On Food Now Totally Voluntary

Eating out now to get cheaper at hotels and restaurants and the government on Friday declared that the service charge on bills is 'totally voluntary.' Union Minister for Consumer Affairs, Ram Vilas Paswan, in a series of tweets, said “Hotels/Restaurants should not decide how much Service Charge is to be paid by the customer and it should be left to the discretion of the customer.”

He also said that new guidelines will be sent to states for required action. The guidelines say that service tax column will be left blank, which the customer can fill at the time of final payment. Speaking to PTI, a senior official of the ministry said, “If there is a mandatory levy of service charge, customers can file a complaint in the Consumer Court.”

The ministry also said heavy fines will be levied with strict action against the violation of this law going ahead. However, the changes being made to the Consumer Protection Bill will give the authority to the Ministry to take the required action. In the last week, Ram Vilas Paswan, speaking about this topic said that an advisory has been prepared by the Ministry and sent to the PMO for Approval. He said, “Service charge does not exist. It is being wrongly charged. We have prepared an advisory on this issue. We have sent it to the PMO for approval.” This action was taken after several complaints were received about hotels charging service tax of 5-20% in the place of tips.