Summary:
Union consumer affairs ministry which has asked the Central Board of Direct Taxes (CBDT) to ask officials to take into account service charge collection by hotels and eateries while assessing their tax liabilities.
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Restaurants may soon have to pay tax on service charge.
This has been informed by Union consumer affairs ministry which has asked the Central Board of Direct Taxes (CBDT) to ask officials to take into account service charge collection by hotels and eateries while assessing their tax liabilities.
The move comes in the wake of reports that many eateries are still collecting the charge.
Ministry sources said there were reports that many restaurants had displayed at their entry that they collected 10% service charge which the ministry maintained had already clarified this cannot be imposed on customers and it`s an unfair trade practice.
In a series of tweets, consumer affairs minister Ram Vilas Paswan has asked the CBDT to consider inclusion of service charge while assessing tax.
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