Features Wednesday, June 10, 2015 - 05:30
  All of us visit restaurants regularly. We check the bill to make sure that we have been billed only for what we have had. But do we look at the bill carefully to see if we have been taxed right? Do we even know what to look for? Here are three quick tips   1. A non air-conditioned restaurant cannot charge you service tax   The Finance Ministry has made it clear again that restaurants, eating joints or messes which do not have the facility of air-conditioning or central air-heating in any part of the establishment are exempt from service tax. This means these restaurants cannot include service tax in the bill.   An air-conditioned restaurant will charge you 5.6% of the total bill as service tax.   2. Service charge is not the same as service tax   The "service charge" which some restaurants may add in the bill is not tax and is not levied by the government. It is collected by the restaurants for the service rendered to you and vary from 5% to 10%. You need not tip the waiter further. You can question the restaurant if the menu does not explicitly mention the service charge.   3. VAT (Value Added Tax) is levied by each state government and may differ.   VAT is applicable on food items prepared in the restaurant and so the restaurant cannot charge VAT on packaged items or water bottles. The rates can be as low as 5% and as high as 20% depending on the state's policy. Each state has different VAT rates for alcohol and food items. Try asking for separate food and drink bills as sometimes restaurants tend to charge the same amount for both.
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