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Updated By: LatestGKGS Desk

Service Charge optional to pay, Service Tax compulsory in 2017



Government makes optional for customers to pay service charge

The Government of India has made it optional for the customers to pay service charge apart from other taxes in Restaurant, hotels and companies.

The Consumer Affairs Ministry has asked the state government and the local bodies to inform all the companies, hotels and restaurant to not make it mandatory to pay service charge.

Service charge different from service tax

Service charge was always optional but the hotels, restaurants and the companies make it mandatory for its customers to pay service charge in addition to the service tax.

Service tax is different from service charge, service tax goes to the government as it is a kind of tax while service charge goes to the owner of hotel or restaurant for providing service.

The government has made it compulsory for the customers to pay service tax but optional to pay service charge.

It has been found that the hotels or restaurants were charging 5% to 20% service charge from its customers that is why the government has taken the decision. 


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