A restaurant charged 12.36% of total bill as service tax ? How can it happen ?

POSTED BY Shishir Jain ON September 5, 2014 4:15 pm COMMENTS (3)

I visited an AC restaurant recently, where they are charging 12.36% Service Tax on total Bill amount, however, they are not including VAT.

Is this correct ? As per my understanding Service Tax can be charged only on 40% of total bill amount, i.e. 4.94% of total bill. Also, per my understanding one must register for ST & VAT when the total annual turnover is > 10 lacs, otherwise, its not compulsory.

3 replies on this article “A restaurant charged 12.36% of total bill as service tax ? How can it happen ?”

  1. Hemanth Chandra says:
    September 8, 2014 at 7:56 pm

    This might help

    https://www.jagoinvestor.com/2013/08/service-tax-and-vat-on-restaurant-bills.html

    Reply
    1. shishirjain2009 says:
      September 9, 2014 at 10:34 am

      Thanks Hemnath !!!

      I read that article few months ago. Earlier I was not aware about ST & VAT rules but after reading the above article, it caught my attention.
      I assume that ,if Restaurant is charging 12.36% ST on total bill then owner is not fully aware about rules, as neither he is including VAT on the bill. And, I doubt if he has actually registered for ST as well.

      Reply
  2. shishirjain2009 says:
    September 8, 2014 at 10:40 am

    can anyone educate me on this please ?

    Reply

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