Government

Levy of service charge from consumers without consent. CBDT to include it while assessing tax

Levy of service charge from consumers without consent. CBDT asked for inclusion of Service Charge while assessing tax to check unfair practice

Press Information Bureau 
Government of India
Ministry of Consumer Affairs, Food & Public Distribution
13-September-2017 19:00 IST

CBDT has been asked to consider inclusion of Service Charge while assessing tax: Shri Ram Vilas Paswan 

Shri Ram Vilas Paswan, Union Minister for Consumer Affairs, Food & Public Distribution told that in order to check the levying of Service Charge compulsorily, CBDT has been asked to consider inclusion of Service Charge while assessing tax. Similarly, directions have been issued to the officers of Legal Metrology of all States to monitor the cases of charging more than MRP.
 
            In order to stop levying Service Charge compulsorily from consumers without their consent, guidelines were issued on 21st April 2017.  A number of renowned hotels/restaurants have made Service Charge optional under the Guidelines. But still the complaints are being received through National Consumer Helpline about levying 5% to 20% Service Charge compulsorily by some hotels and restaurants.  Some media reports have also been published in this regard. 
 
            To stop this unfair practice, hotels and restaurants have been asked either to leave the column of Service Charge blank or mention on the Bill that it is optional. It means that the consumer can pay the Service Charge if he or she wants.
 
            In this regard State Governments were asked to issue directions to hotels and restaurants to display the message at an appropriate place that Service Charge is completely optional and if the consumer is not satisfied with the services of that hotel or restaurant, he or she is free not to pay Service Charge.
 
            Similarly, guidelines have been issued in April 2017 against levy of Service Charge compulsorily and consider it as an unfair trade.   In addition to it, all the States have been asked to implement these guidelines strictly and sensitize the consumers about the same through publicity. These guidelines were sent to Federation of Hotel and Restaurant Association of India (FHRAI), National Restaurant Association of India (NRAI) and Hotel Association of India (HAI) also.
 
          Advertisements have also been released under ‘Jago Grahak Jago’ conveying the message among consumers that Service Charge is not mandatory but a tip which is fully a discretion of the consumer.  Hotels or restaurants cannot compel the consumer to pay Service Charge.  Similarly, Voluntary Consumer Organizations have also been asked to increase awareness and pick up some cases for exemplary remedial action.
 
AK 
*****
Share

Recent Posts

  • Income Tax

AO can’t take two different stands on immunity u/s 270AA(2) for a same transaction

Immunity u/s 270AA(2) in respect of a single transaction can not be denied to one assessee when the penalty was…

50 minutes ago
  • Income Tax

ITAT held 2000 gram jewellery reasonable in view of customary practices & CBDT Instruction

ITAT deleted addition u/s 69A towards jewellery found in search in view of Indian traditions, CBDT Instruction and High Court…

19 hours ago
  • Income Tax

Documents obtained post search & information obtained from public domain not incriminating material

Documents obtained post search and information obtained from the public domain not incriminating material. Documents obtained by AO post search…

2 days ago
  • Income Tax

No second reopening for unexplained credits in bank due to bank’s name change

Information of deposits in bank did not constitute fresh information necessitating second reopening due to change in bank name In…

2 days ago
  • Empanelment

FDCM invites application for empanelment of practising CAs/ Chartered Accountant Firms

Invitation For Empanelment Of Practising Chartered Accountants / Chartered Accountant Firms Forest Development Corporation of Maharashtra Limited (FDCM Limited), Nagpur,…

1 week ago
  • Empanelment

PGRI invites application for CAs for empanelment for Circulation Verification work

Press Registrar General of India (PGRI) invites application for empanelment of Chartered Accountants. The Press Registrar General of India manages…

1 week ago