Hotels, restaurants may have to pay tax on service charges

Eateries have been asked either to leave the column of service charge blank or mention on the bill that it is optional

Cracking its whip on hotels and restaurants still levying a service charge, the Consumer Affairs Ministry has asked the Central Board of Direct Taxes (CBDT) to consider service charge as income while assessing the tax returns. 

Union Consumer Affairs Minister Ram Vilas Paswan said that while hotels and restaurants have complied with Centre’s guidelines, several consumers, through the National Consumer Helpline, are still complaining about high service charge.

In view of seriousness of issue, Deptt. of Consumer Affairs has written to CBDT to consider inclusion of Service Charge while assessing Tax.

— Ram Vilas Paswan (@irvpaswan)