I refused to pay service tax at this restaurant – Guess what happened next?

POSTED BY manish ON April 3, 2017 COMMENTS (203)

Yesterday I went to watch a movie late night at Amanora town center in Pune. I and my wife had our dinner at a small Italian restaurant and the food there was quite good.

When it was time to pay the bill, I went to the counter and paid the bill. When I got the bill in my hand, I realized that there is a problem. They had charged me “service tax”. However the main issue was that there was no service tax number mentioned on the bill.

illegal service tax charged

Charging Service Tax without Service tax number is Illegal

Yes, you heard it right.

The Bill copy did not have any service tax number mentioned on it, but the restaurant had put a service tax charge on the bill. This is Illegal and can’t be done. Hence I told the staff that I can’t pay that service tax unless they give me the service tax number.

The staff as usual was ignorant about this and told me that I should talk to “owner” and tried to give me his number. However I told them, it’s not what I will deal with and I will not leave unless they give me service tax number because they are illegally charging service tax.

Finally after 5 minutes, the staff told me that Owner is not reachable and they will give me service tax number later. But I refused to budge and demanded them to pay me service tax amount back and not repeat this, as its illegal.

Finally they had to refund me back and I took the money. Here is what another CA has to say about this on Quora

service tax rules

I realized that not more than 1 out of 1000 people know this rule, and this needs to be spread among people. Many restaurants are misusing the fact that now people know that service tax is a unavoidable tax and has to be paid, however many do not know the rules and conditions under which any business can charge it. Even Service charge is now an optional thing and you decline to pay it.

Note that many restaurants will tell you that they have applied for the service tax number and are awaiting it, but this is mostly a trick to fool you and to save themselves out of the situation and embarrassment. However even in that case it’s not right, and you should demand to see the proof for that.

Service tax number is mandatory to charge Service Tax

As per service tax rules, service tax can be charged only if you applied and got your service tax number. This service tax number has to be written on the invoice copy. Without that you cannot charge service tax from your customers.

In case of restaurants, the service tax has to be charged only on 40% of the FOOD bill and beverages. So if you eat for Rs 1,000 (food + beverages), then only 6% on the total bill is to be charged, which will be Rs 1060.

Here is a sample of a correct bill which mentions the service tax number on the bill itself.

service tax mentioned on bill invoice copy

How to verify is the service tax number is valid and not fake?

Few people ask me, how to verify that the service tax number mentioned on the bill is not fake? Because the hotel guy can just randomly put some number, which looks like the service tax number.

The simple solution is to check the name of the person/company under whose name the service tax number is registered. It just take 1 min to verify that.

  • Step 1 : Go to this link
  • Step 2 : Enter the 15 digit Service tax code (also called Assessee code)
  • Step 3 : Enter the captcha

Once you do this, the page will show you the

How to check if the service tax number of the bill is real or not?

Non Bailable Offence under sec 89 of service tax

If service tax is charged without service tax number, then how will it be paid to government? Because you need the service tax number to pay the tax to govt. Sec 89 of finance Act tells that incase an offence is done like this, then the person can be jailed for up to 1 yrs (and up to 2-3 yrs incase amount involved is above Rs 50 lacs).

Below is a snapshot taken from Taxguru website which writes about tax related topics.

illegal service tax rules

Do you need to pay service tax if you dont sit in AC?

This is very interesting.

One of the biggest questions people raise is that if a restaurant has AC in one part, but not in other part and if you are seating in a non-AC section and dined, still do you have to pay the service tax?

Or imagine is AC was not working at that time, even then will you be charged the service tax?

The answer to that is YES.

Sorry, but the service tax rules clearly states that. The service tax rules simply says that if the estabilishment (the hotel or restaurant) has the facility of air conditioning or central air heating in any part of the establishment, then they have to charge the service tax in their bill.

It does not matter if you got the benefit of the AC at the time of eating. All that matters is that they have AC anywhere in the premises.

This itself is enough for a restaurant to charge the service tax. However if an establishment is divided into two parts with the two different names and entities, then the non-ac part cant charge the service tax (where the service was given) , even if the food was prepared in the AC part. Here is the exact wordings from the service tax notification on this issue

Can restaurant charge service tax even if customer does not enjoy the AC

3 things to remember when you visit a restaurant next time

When you visit the restaurant next time, make sure you keep in mind following 3 points.

  • Check if service tax number is mentioned on the bill or not, if they are charging service tax on the bill
  • Make sure the service tax is charged @6% on the food + non-alcoholic bill and 15% on the alcoholic charges
  • Make sure there is AC in the restaurant if you are charged service tax.

Spread this Information

There are thousands of restaurants which might be charging service tax illegally without have service tax number and millions of customers on daily basis are paying that as they are not aware of the exact rule. This is practiced by many restaurants, small hotels, and many other businesses.

So spread and share this article as much as you can so that more and more people can know about this. Also share your experience about this.

203 replies on this article “I refused to pay service tax at this restaurant – Guess what happened next?”

  1. A says:

    Hi

    Thanks for such an informative article.

    One thing which I always wanted to know.
    Why should a Retail Customer be presented with different types of taxes and charges in the bill of restaurant? The only thing a Retail Customer is interested in, is the final price of each food item he/she is buying from the restaurant. Why doesn’t the govt. make it mandatory for the restaurants to show the net price of each food item in the Menu Card as well as in the bill.

    When we buy a packaged commodity, we only get to see the M.R.P. of the commodity. The same should happen in case of food items served in the restaurants. These restaurants must display only ACTUAL FINAL SALE PRICE(Which should include all the taxes, service charges etc.) in the Menu Card as well as in the bill.

    Thanks
    A

    1. I dont think its going to help restaurants a lot .

      By putting the final price, the prices will look very high and a lot of people will not come to restaurants in that case. If the taxes are put later, it works for the business.

      Note that here we are talking about the behaviour of a large population and not just you

      Manish

  2. puneet says:

    You are doing great job, I get idea to save money with your blog thanks.

    1. Glad to know that puneet ..

  3. Bhanu Pratap Singh says:

    Hi, I regularly follow the topics on Jagoinvestor.com and this one is an eye opener for me, I wasn’t aware of the fact, infact I talked to some of the friends about this and most of them were unaware.
    Thank you Manish for sharing this interesting fact with us.
    Keep Sharing.

    Regards
    Bhanu

    1. Glad to hear that 🙂

  4. sameer says:

    Very Good Article… Eye opener….

    1. Glad to know that sameer ..

  5. shan says:

    Hi,
    I have one query on service tax.
    Recently i resigned from a company where they had 3 months notice period, i could only give them one month notice. I agreed to buy the remaining two months notice. On this amount they charged a 15% service tax.
    Is this legal? The amount was around few thousands.

    1. I dont think its right .. THey have just charged it thinking that people have no idea how service tax works !

      Manish

  6. Balaji says:

    Service tax @ 4.94% should be charged on the Service Charges only and Not on the full bill amount.
    For Ex :
    1. Food & Beverages : Rs 1000.00
    2. Service Charge : Rs 100.00
    3. Service Tax @4.94% : Rs 4.94 (4.94% of Rs 100)
    4. VAT @14.5% : Rs 145.00

    But what some Restaurants do for Pt 3 above Service Tax is 4.94% of Rs 1100 = 54.34 which is Rs 49.40 extra (54.34 – 4.94).

    Hope this is clear. Watch out guys and always question the restaurant if they over charge you because it is our RIGHT !

    1. Sir, where have you read this ? Its incorrect.

      Charging the ST on the food bill is as per rules.

      1. Balaji says:

        hi Manish,
        I don’t recall where I read it, but I think what I mentioned earlier is wrong. The below is correct.

        Service tax is a tax levied by the government. This is 14 per cent and is payable on 40 per cent of your total bill. The bill is inclusive of food, drinks, service charge and other services such as the ambience.

  7. Ankur says:

    Good article. I had read somewhere that service tax is only applicable on service charge. Can, you clarify ?

    1. No, thats not correct.

      Its applicable on the the 40% of the bill for food

      Manish

  8. Pavan says:

    Hi,

    I regularly follow the topics in Jagoinvestor and this is an eye opener.

    So yesterday (23-Apr-2017) I went to a restaurant in Bangalore and they charged service tax without mentioning service tax number on the bill. Then I remembered reading this topic and immediately spoke to the restaurant manager and he said that TIN number is already mentioned and it is applicable for both VAT and service tax. I clearly told him that TIN is for collecting VAT and you need a service tax number for collecting service tax. I said I will not pay the service tax but they didn’t budged and said that I have to pay service tax. As I could not do much there I quietly paid service tax and came out of restaurant. Is there anyway I can raise complaint against this restaurant.

    1. Yes, you can complain to service tax department on this as they have collected the service tax without registration. You should have told them that they should call Police here as they are illegally charging it and its an offence.

      Manish

  9. Sushant says:

    Eye opener. Interesting fact. Will surely keep an eye on this next time I dine in a restaurant.

    1. Glad to know that Sushanta ..

  10. Pallav says:

    According to the Supreme Court guideline 2017 nobady can force to pay the service tax .Its uppon customer are they wish to pay it or not ?If some one force you can immediatly call police,licence may be cancelled or sealed for that as a punishment.

    1. That guidelines is for “Service Charge” , not service tax.

      Manish

  11. ashok says:

    Very informative one. Thanks.

    1. Thanks for your comment ashok

  12. Sireesha says:

    Thnq..It’s very informative

    1. Thanks for your comment Sireesha

  13. Yogesh Salgaonkar says:

    Thank you very much Sirji. This article is very informative. Were getting fooled. Looking forward for such information on other issues too. Thanks again.

    1. Glad to know that Yogesh Salgaonkar ..

  14. Sarthak says:

    I visited a restaurant and they had Service charge and Service tax. So which one can i deny to pay?And do the service charge also have to have a no.

    1. Service charge you can deny. It does not have any number !

  15. pawan agrawal says:

    I visited a restaurant for food. It was having only 2 coolers. AC was in rooms only. They charged service tax on the bill. I resist on the plea No AC- No Service Tax. They show me a letter that if AC is installed in any part of the unit, Service Tax can be charged. ” for exemption from service tax on restaurant services, the establishment should not have the facility of air conditioning in any part”.
    What to do now.

    1. They are correct. Its also mentioned in the article ! , did you read the full article word by word?

      1. pawan agrawal says:

        Thank you Manish Ji
        I read the concerned para only. But AC is installed in the rooms of hotel only not in the restaurant.
        I understand rooms and restaurant are part of hotel and thus service tax is levied.
        Thanks

        1. I am still not clear them, as the law says that it should be installed in any part of the establishment. Now its not clear what does that mean .

          Manish

  16. Pulkit says:

    Can you make it clear..If restaurant has AC facility and it is charging service tax but the service tax number is not mentioned on the bill. Can we refuse to pay the service tax in this case?

    1. Yes, service tax number is mandatory to charge service tax.

  17. Milind Ganbawale says:

    Yes I am totally agree denied to pay illegal service tax and Government need to action on such restaurants ” Jago Grahak Jago”

    1. Thanks for your comment Milind Ganbawale

  18. Radha says:

    Can service tax be charged for take out order ? I recenty purchased some donuts from a dunkin donuts shop in bangalore. They charged 6% aervice tax. I did not sit in AC or something. Just ordered, paid using CC and walked out

    1. As far as I understand They cant charge ST for takeout or home delivery, But still I need to get deeper into this and find out !

      1. Jo says:

        If you could update this comment here, after you find out, we would all be grateful. Thanks for the info as I wasn’t aware of it.

  19. Uday says:

    In the above bill the restaurant has charged service tax on food plus service charge is that correct?

    1. I will have to check that . Not yet clear on this .

  20. Punit says:

    But why u have to pay service tax on service charge

    1. I think its not right . But I need to check that !

  21. Anjali says:

    How about Service charges? Is it deniable as per the new law?

    1. Yes, its optional . You can refuse to pay that !

  22. Aniket says:

    THanks for detailed Info. This is indeed useful

    1. Thanks for your comment Aniket

  23. Akansha yadav says:

    I received a bill in which only GES code is written. Not service tax number. They changed 6% service tax. Is service tax number required in this case?

    1. I am not sure what is GES Code ?

      Service tax number OR Assessee Code is required on the bill . Its a 15 digit code !

  24. Sreedevi says:

    Hello Sir,

    Thanks for sharing this valuable info with us. Could you please tell me if I can walk out of the restaurant without paying a service tax that comes without service tax number? What can I do if the hotel people pressurizes me to pay the full bill without the tax number then whom should I consult for assistance?

    1. You can call police and create a scene ! .

  25. Sandip Sabnis says:

    Good Info Manish. Thanks.

    1. Thanks for your comment Sandip Sabnis

  26. Sheena sahni says:

    What about service charge? Many restaurants charge the same at 5 or 10% of the total bill. Is it mandatory to pay this amount?

  27. HAP says:

    Hi Manish,
    Its a very informative article!!!!
    How would ST & VAT tax rules work for home delivery?

    Let us say, how should the tax rules work for a newly started restaurant which belongs to a chain of restaurants and which might not have touched Rs10 lakh business individually on its own? Please clarify.

    Thanks ,

    1. VAT will apply for sure, because its a sale related tax and not service related. I am sure what happens in delivery case. Will have to find out !

  28. Kundan says:

    is service tax also applicable on food parcel?

    1. I am not yet clear on that !

    2. Jitin Singhal says:

      Service tax is not applicable on home delivery.
      However, restaurant arbitrary levy service tax on home delivery.

  29. Pando says:

    Its surely not illagal but i think its illegal.

    1. I have already corrected that mistake

  30. Sandeep says:

    Manish, while I agree with most part of your article, is the service tax not common at 6% now for food, non alcoholic drinks as well as alcoholic drinks? I’ve not seen any restaurant charge the 15% on alcoholic drinks till date. So is the information on the article incorrect or are the restaurants undercharging? I’ve always seen a single service tax amount everywhere and not two separate amounts.

    1. Sorry, it was my mistake

      Only the VAT is different for Alcoholic drinks , hence separate bill is made for that. I have corrected the mistake. Thanks for pointing that out !

  31. Kini shetty says:

    Thnks Manish..
    I just ordered icecream from POLAR BEAR . N noticed that even they have not mentioned service tax number..I was charged 7₹ only.but still I called to the outlet and asked them to update their bill with tax number ..they sounded confused and dint know anythng abt it..finally the lady said she would verify with other outlets too..
    This is very informative..thnks ?

    1. Good to know that !

  32. Nidhi Jain says:

    So Manish What is your plan of actoin? Just the article ? I see you have not even disclosed the restaurant name? Why?

    1. Because the motive of this article is not to defame a particular restaurant, but the practice of charging service tax in a wrong way. It might happen that the restaurant owner is themselves not aware of the rules and might have applied for the service tax number and was thinking that they will charge the tax and pay later.

      We never know. Hence the article is only focusing on the information and not to defame anyone.

  33. Kaustubh says:

    Thankyou for sharing awareness regarding service tax.

    1. Thanks for your comment Kaustubh

  34. Vivek Singh says:

    Very informative article. I surely was missing this information and I sent this to all my whatsapp group as well.

    One question though, can we get a official copy of the order issued by government?

    1. Even I will have to check for that 🙂

  35. Anonymous says:

    Hey Manish,
    Last weekend I alongwith my friends went to a Lounge Bar, the bill for food + alcoholic stuff was around 2600 but the total bill came with an amount of Rs 3200 i.e they charged almost Rs 600 as tax. Is that leviable..?

    1. Yes, service tax and VAT must be there. They are legal charges !

  36. Swapnil Yeole says:

    Hi Mainsh,

    There are many restaurants, which have ac and non-ac sections. So can the restaurants charge service tax even if you dine in non ac section?

    Also I have some popular fast food chains charge service tax on home delivery too, so is this legal?

    1. Yes, there is rule that to charge service tax the hotel needs to have AC in any part of the premises. Check this – https://www.cbec.gov.in/htdocs-servicetax/st-circulars/st-circulars-2013/st-sirc-173-2013

      1. Veera ghadiali says:

        Recently in lavasa the charged us all taxes on all four different bills with added kissan yoga now .
        Why cud they not make one bill only??

        1. But how is it hurting you anyways .. even in one bill you would pay the same tax ?

    2. Praful Gangurde says:

      You had still charged wrongly by Barbeque Nation. FYI if any hotel include Service Charges in the bill then Service Tax will be applicable only for Service Charges and not for the entire bill.

      1. Where have you read that Praful? I dont think the law says that !

  37. chanda says:

    What if online companies are charging service tax for there product without mentioning service tax registration number on Online Invoice.

    1. Same rule. Its illegal !

  38. Shreyansh says:

    Thank you for your valuable write up. Really helpful!

    From now on I will definitely check for the service tax number.

    1. Glad to know that Shreyansh ..

  39. Sharon says:

    Hi Manish!

    So I have a doubt. If there is an AC in the restaurant but I chose to sit in smoking zone without the AC. Will the service tax be still applicable?

    1. Yes, there is rule that to charge service tax the hotel needs to have AC in any part of the premises. Check this – https://www.cbec.gov.in/htdocs-servicetax/st-circulars/st-circulars-2013/st-sirc-173-2013

  40. Debasish says:

    If any restaurant has AC installed but they are not using it, can they charge service tax?

    1. Yes, there is rule that to charge service tax the hotel needs to have AC in any part of the premises. Check this – https://www.cbec.gov.in/htdocs-servicetax/st-circulars/st-circulars-2013/st-sirc-173-2013

  41. Aditya says:

    Thanks for this valuable info.

  42. Amol says:

    What if they charge ST forcefully.?? What to do after process? How to refuse paying st ??

    1. If they are charging illegally, then you dont need to pay, Call Police.. If if its charged legally, then you need to pay

  43. Mukulesh Deka says:

    How to make complaint about such illegal practices to make a case to punish the defaulters? Consumer Court or Service Tax Department?

    1. Service tax department.

  44. Amita A virkar says:

    Good article.Thank you Manish.
    can they charge service tax for free home delivery food items? (assuming that the restaurant is Ac)

    1. No , they should not charge it !

  45. Noufi says:

    Thanks for the information.. I am from Kerala and now am working in Lucknow. Here most Of the restaurants taking service tax.. But I was not aware of that tax number.. Next time I can notice about the tax number as u did.. Once again thank for the information,,

  46. Manoj says:

    In the screenshot for the correct sample bill (Barbeque Nation bill), the service tax is noted as 5.6% and not 6%. why is that so? Also service tax component should not be charged on the so-called Service charges (5%) charged on the bill, is that right?

    1. Its because its an old bill when service tax was 14% . Hence (40% of 14% = 5.6%) .

      Service tax can not be charged on service charge !

  47. Suvashis says:

    Great article!! When you order food online can they charge service tax?or what other taxes? Legal or illegal points in this aspect. Kindly share.

    1. they cant charge service tax. Because there is no service.

      its only SALE !

  48. Allen Paul says:

    Manish, is it illegal for Businesses to not provide Receipt without Service Tax number printed , or only if they do not have the Service Tax number at all. In other words, can I refuse payment if I get a receipt without the number printed regardless of whether they are operating with or without the ST registration done?

    Thanks,
    Allen

    1. No , its not illegal to do business without service tax. Service tax is to be paid by a business only if their yearly reciepts are in excess of Rs 10 lacs. Also its a matter of payment of service tax between business and tax department. You dont have anything to do with that.

      The only wrong thing is charging service tax from customers without service tax number registrations.

      Manish

  49. Gaurav says:

    What if owner of hotel still refuses to pay back…can we file case against them in police station??

    1. Definately. They are doing illegal thing . You can call the police !

  50. tanya says:

    Make it so viral .so that at least these faults cannot be find in new GST rates followed by gst rules

    1. Thanks for your comment tanya

  51. Meha says:

    This is really an eye opening article. Thanks manish for sharimg such useful informaton.. 🙂

    1. Thanks for your comment Meha

  52. Priyhersh says:

    Quite an informative article, thanks for making aware.

    1. Thanks for your comment Priyhersh

  53. KK says:

    Hi,
    First of all i very thanks to you for ST points message through aware people.

    Those people are regularly go for dinner or lunch in hotel or restaurant to know that why should i paid without ST number update on bill . Thanks you for this massage through acquainted innocent people.

    I just one question asking you. Many restaurant has service change approx 5 to 10% on total amount of bill. is it correct or Illegal?

    Many people asking me the issue of SC.

    1. Its not illegal.

      They can put that in the bill, but you have an option to deny it !

  54. Sandeep Pradhan says:

    Nice article and an eye opener.

    1. Thanks for your comment Sandeep Pradhan

  55. YL Deepak says:

    I have a doubt on VAT and service tax in a restaurant bill if 40% of the bill is to be taxed for service then VAT has to be charged for remaining 60% only as its raw material but VAT is charged for 100% bill and service tax on 40% bill which leads to double taxation.

    1. No , VAT is to be charged on the full 100% bill as per the rule . Yes, there is double taxation.

  56. Lingadahalli chethankumar says:

    Bangalore all restorents add illege service tax ples action to ilegel persons or restirents

    1. Spread this to all bangaloreans 🙂

      1. Rituraj says:

        What is the difference between service charge and service tax ?

        1. Service tax – levied by govt and its compulsory to pay
          Service charge – levied by restaurant as replacement of tips and its optional to pay

      2. Himanshu says:

        How do I lodge complaint against this scandal run by many restaurants.? To whom should I contact?

        1. You can complain to service tax department on their website.

  57. amanb says:

    CAN ONLY AC RESTRAURANTS CHARGE ST ??? AC includes cooler???

    1. Yes, only with AC !

      1. Aman says:

        Sir whether centralised cooler is ac

  58. Taral Shah says:

    Hello Manish,

    Manish can i use your content and write another article of mine??

    1. No , our content is copyrighted. Not allowed to copy ! . Sorry !

      Manish

  59. Can anyone check if cream center has valid service tax number

    1. You can see it on their bill if they are charging it !

  60. Varun says:

    Awesome article !! Thanks !!

    1. Thanks for your comment Varun

  61. Sid says:

    So Manish, does it mean that the concerned Restaurant was collecting ST and since it did not have a ST No. it was not depositing it with the government?

    If yes, then it is also illegal.

    1. Yes, thats exactly correct.

      Seems like they are just collecting ST because they know people do not know rules. However the point here is the validity of ST on bill without mention of ST number.

      1. Aashish says:

        Is it possible that they are writing ST on the bill, but they do not mention it in the backend, as result of which it does not show up while auditing.. How to detect that case?
        Also, What is the funda of AC? It is mandatory to have AC for charging Service tax?

        1. Yes its mandatory to have AC for charging AC.

          When they give you a bill with ST number, now legally they are bound to pay that ST amount to govt. If the money is paid in bank account directly, then its very tough for them to escape it because due to audit or any enquiry from ST officials will lead them in problem.

  62. Dominic says:

    Really very informative article. Thank you.
    We are waiting for your next VAT-Article.

    1. Will do that .. but I am thinking that if its going to be helpful or not, as from July we will have GST anyways and VAT will be a thing of the past !

      Manish

  63. Anurag Garg says:

    There is a direct link for Service Tax verification. – https://cbec-easiest.gov.in/EST/AssesseeVerification.do
    Its same site, just different link.

    1. Thanks for sharing that !

  64. Vijay says:

    Nice. Enlightened upon burning issue. Every customer is required to be vigilant. It is futile to expect from Govt. Machinery.

    1. Thanks for your comment Vijay

  65. Pandu says:

    Very informative article Manish,
    I was wondering if you can also enlighten us on merchants charging the customers for buying goods on credit cards.
    I come across sellers who say, ‘Sir, If it is credit card it will be 2% extra’. Who has to bear the burden of paying the service tax on credit card?

  66. Akash Shah says:

    Hi Mr . Manish,
    Really an eye opener for all of us how these guys can fool us.
    Recently i visited one restaurant where they charged Service Tax plus they charged VAT along with Service Charge.

    Not sure who can levy VAT over and above Service Tax

    1. I will do an article on this topic very soon , thanks for asking that !

      Manish

      1. Akash Shah says:

        Thanks For the same.

  67. GK says:

    Thanks for this. I was not aware of this. I just noticed that my restaurant bill from yesterday has two separate bills adding up to a total – the typical way cafes bill is separately for bar and food. I had ordered a cocktail – Bellini – which is sparkling wine and peach nectar. I am charged a service tax on this drink as well – it’s from bar menu and billed separately. Do you think I was charged wrong here? I am not sure if wine falls under alcoholic or non-alcoholic as per govt. regulations.

    1. Service tax is charged for service and not for food item, so its uniform across all kind of food/drinks.

      What will be different is VAT , as VAT is different (high) for alcoholic drinks, Thats the reason they must have put the separate bill

      Manish

  68. Timma says:

    I added comment before update, thanks for sharing how to verify service tax number.

  69. Ashok Sharma says:

    Great information. I am sure the owners of the establishment must be aware of rules and regulations that exist and not abiding by them should be deemed intentional by us all. These acts need to be challenged.

    Thanks Manish

    1. Yea , I guess so !

  70. Biju says:

    How come the first bill charges service tax of 4.94% and the second bill 5.6% ?

    1. The first bill is using 12.36% as the reference point (40% of 12.36 = 4.94%) , which in itself shows that they are just using it from long and have not changed it as per 15% .

      The second bill is a valid bill, but a little bit older when the service tax was at 14.5%

  71. Bhaskara Reddy Chirla says:

    How can we check this number, if it’s present? There can be some junk number too. People are smart in doing this

    1. THere is a way to check the number.

      You can go to https://cbec-easiest.gov.in/EST/InputPageForEPaymentServlet

      Put the ST number there and it will show you the name of the person/company . You can verify like this.

      Manish

  72. Santhosh says:

    oh.. nice info… need to share
    The 3rd point.. “Make sure there is AC in the restaurant if you are charged service tax.” any specific reason?
    What about non-AC restaurant/Take-away who charge service tax?

    1. As per service tax rules, Restaurants with AC can charge ST, else not !

      1. Vickram says:

        What about restaurants who have part ac ? In such a case is the whole restaurant covered under service tax ? What about delivery or parcel services ?

        1. For your first question – Yes, there is rule that to charge service tax the hotel needs to have AC in any part of the premises. Check this – https://www.cbec.gov.in/htdocs-servicetax/st-circulars/st-circulars-2013/st-sirc-173-2013

          For parcel , I am not sure yet. . need to study !

  73. Nilesh Pandit says:

    Thank you Manish for this excellent information. I make sure to check service tax number on invoice but I was not aware of all these details. Especially last point in ‘things to remember’ got my attention.

    About AC, I found following explanation in one of the article:

    https://www.business-standard.com/article/pf/check-your-restaurant-bill-before-you-pay-115101800796_1.html

    “Since only air-conditioned restaurants are liable to pay service tax, there were instances where five-star hotels would charge service tax in their AC restaurants but not in their poolside restaurant. To avoid this anomaly, the government has clarified that any restaurant with even one A/C or central heating should pay service tax. So, the next time you eat out, check your bill carefully. If you are being over-charged, bring it to the notice of the staff and, if required, the tax authorities.”

    1. Glad to know that. Which means that even if there is an AC in the hotel, and even if I am not getting its benefit , I will have to pay service tax ?

  74. Rahul Gupta says:

    Great information feel happy to read this but want to know to whom we can complain if restaurant owner do not agree with the fact?

    1. You can complain to service tax department.

      Also it depends how you handle the situation. Just tell them you are calling the POLICE and really call them !

      Manish

  75. Abhishek says:

    How about service charge? Is it mandatory for customer to pay whatAever service charge gets printed on the bill? Or it’s optional?

  76. sundararajan s says:

    if they give some numbers how we are going to verify. This may be silly question. this is my doubt

    1. I added that method in the article just now . Here it is

      How to verify is the service tax number is valid and not fake?

      Few people ask me, how to verify that the service tax number mentioned on the bill is not fake? Because the hotel guy can just randomly put some number, which looks like the service tax number.

      The simple solution is to check the name of the person/company under whose name the service tax number is registered. It just take 1 min to verify that.

      • Step 1 : Go to this link
      • Step 2 : Enter the 15 digit Service tax code (also called Assessee code)
      • Step 3 : Enter the captcha

      Once you do this, the page will show you the

      How to check if the service tax number of the bill is real or not?

  77. Shantanu says:

    Why restaurent needs to have AC to charge service tax?

    1. Thats the govt rule !

  78. Sunny says:

    Thanks, for the useful information.
    Please clear weather service tax can be charged only in AC restaurants or in Non-AC too….
    What can be done if a Non-AC restaurant charges service tax along with ST number mentioned in the bill..?

    1. It can only be charged by restaurant which has AC. It might happen that AC is not present where you are sitting, but still they can charge.

      It cant be charged if there is no AC as per rule.

  79. abhi says:

    Similar experiance but it was about Service Charge.
    Yana Sizzler’s FC Road Pune – . With regular price they charge 5% service charge extra. I refused to pay that extra service charge (as per recent court orders about extra service charge its up to customer to pay or not).They argued like “you don’t like service ? Its written on menu card , talk to the Owner etc. but later excluded from the bill. If you are concerned about not paying that extra charge you do refuse it.
    I had read article about service charge from your website which helped me here.

    Yana Sizzler’s had the Service Tax number. Thanx to your artical will see for this addition next time

    1. Great to know that experience !

  80. vicky says:

    Informative and worth noting, thanks Manish

    1. Glad to know that vicky ..

  81. Venkata Mahesh says:

    If your food bill is 1000/- and restaurant charges service tax 15% wrongly instead of 5.6% and they mentioned service tax no on the bill. Then what to do ?

    1. Its wrong .

      For food and non alcoholic beverages, the service tax is applicable only on 40% of the bill. So its 40% * 15% = 6% . SO they cant charge 15% on the bill. Its illegal !

      You need to educate them and tell them they are fooling customers !

  82. RD says:

    I was aware but only partially (AC restaurent part).. Thanks Manish for sharing.

  83. Vishnu Vardhan Reddy C says:

    Congratulations. You proved that knowledge is wealth.

  84. JP says:

    Good info. Thanks Manish.

    1. Glad to know that JP ..

  85. mayur says:

    Charging Service Tax with Service tax number is Illegal
    It should be a “without” in the statement and not “with”

  86. Bal says:

    The government should use a standard format for restaurant bills n applicable rules should be printed at the bottom. This can prevent many disputes. As service charge is now optional, it should not be applied by sellers. One may tip as per one’s wish.

    1. Yes .. I wish for that too !

    2. Anjan says:

      I think this is the best approach to avoid all this nonsense. There must be a standard format for the restaurant bill. So if the box for Service Tax Number is empty, you instantly know that the restaurant is charging tax illegally. As for service charge, I think restaurants should clearly mention that at the top of the menu chart so that you don’t get a nasty surprise when the bill is printed.

      1. I think there is a rule that service charge has to be mentioned on the menu, otherwise a restaurant cant charge it .

  87. Nitesh says:

    Statement:
    Charging Service Tax with Service tax number is Illegal
    Correction:
    Charging Service Tax without Service tax number is Illegal

    1. Thanks for pointing that out ! .. Fixed it !

  88. Vijay Sharma says:

    I think there was a drive by the govt some time back where they asked people to send the scanned copies of the invoice to them so that they could check if tax pertaining to that invoice has been paid or not. There were cash prizes that were given to randomly picked users to encourage people to send their invoices. I dont remember the details , will post once I get it.

    1. Really ! .. thats great !

    2. Bhaskara Reddy Chirla says:

      Can you please give more details, where to send copies?

  89. Muthu says:

    Excellent piece of information. Oh yes, Im not aware of all these..

    1. Glad to know that Muthu ..

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