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Now Choose to Pay Service Tax when you Dine Out.

Now Choose to Pay Service Tax when you Dine Out Food of India

Now Choose to Pay Service Tax when you Dine Out Food of India

With India being swamped with demonitization, and several other institutional and constitutional changes. This one surely comes to stir a sentiment among restaurant owners and diners alike. Will it be able to weigh out and sustain? That is the question among many a restaurant owners alike.

So here is the deal, incase you eat out and are not happy with the service at your restaurant, you can choose to pay the service tax that is automatically calculated on your bill when you pay up. The government has made it clear, that a service charge that usually ranges from 5 to 20 percent in most restaurants is added to bills and not in the form of tips should be waived off. The department of consumer affairs states that adding this charge is a violation on fair trade practices and therefore must be abolished.

On the contrary the Hotel Association of India has been more accepting of the same and said that it was absolutely alright incase the guest chose not to pay a service charge if he wished to, should he have felt that the service was not upto the mark or inadequate.

State governments have been instructed to issue notices at the entrance of restaurants making diners aware that this will be the norm, and an optional service charge can be expected to be paid, should the guest be a dissatisfied one.

The statement issued speaks of the following facts:

A number of complaints from consumers have been received that hotels and restaurants are following the practice of charging ‘service charge‘ in the range of 5-20%, in lieu of tips, a consumer is forced to pay the same without the validation of good or exceptional service.The Consumer Protection Act, 1986 provides that a trade practice which, for the purpose of promoting the sale, use or the supply of any goods or for the provision of any service, adopts any unfair method or deceptive practice, is to be treated as an unfair trade practice and that a consumer can make a complaint to the appropriate consumer forum established under the Act against such unfair trade practices.

The Department of Consumer Affairs has asked the State Governments to  let the the companies, hotels and restaurants in the states be aware regarding these provisions of the Consumer Protection Act, 1986 and also to advise the Hotels/Restaurants to disseminate information through display at the appropriate place in the hotels/restaurants that the ‘service charges” are discretionary/ voluntary and a consumer dissatisfied with the services can have it waived off.

There seems to be a mixed sentiment on the same, however we do feel that an individual has the freedom to exercise what he pleases in terms of his satisfaction. This has long been a debate that people have eaten and paid for a very sub standard service. How can this be bettered? The only fair practice would be to make it optional.

What are your views on this change? Will it work for the better for restaurants or consumers? Let us know in the comments section below.


Sneha Trikha
Sneha Trikha
A former chef and social media expert, I have honed my skills in the kitchen as a chef with The Park Hotels at the start of my career and then branched onto writing for Zee Khana Khazana, and handled social media for JSM Corporation (Hard Rock Cafe, California Pizza Kitchen as well as the other brands under the organisation) I am an avid reader, love wildlife, art in any form and am still a passionate home baker. I love to curate my own recipes and contribute to a personal food blog that i write on.

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