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Restaurants that have made service charge mandatory may now have to pay 'special' tax: Reports

Service charge is not mandatory, as per a government order

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Restaurants that have made service charge mandatory may now have to pay 'special' tax: Reports
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Restaurants that have made service charge mandatory may now have to pay a separate tax to the government, it has been reported.

The government earlier this year had clarified that service charge on a food bill was optional and the customer can choose to waive it. However, some restaurants have still made it mandatory for the guests.

As per a Times of India report, the Union consumer affairs ministry 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 report, quoting officials, further said that restaurants still continuing with compulsory service charge "must come out with a white paper to prove they were distributing the collected amount to the staff. If not, the collection should be taken into account as part of their income".

Meanwhile, in a series of tweets consumer affairs minister Ram Vilas Paswan wrote:

 

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