Service Tax at Restaurants and Hotels would be voluntary now. The Department has announced that if the consumer is not happy with the service then he or she can get it waived off. This came after Hotel Association has said that the Service Tax is always at the discretion of the consumer. But how does it help?
For the Consumer
Consumer generally ends up paying at 5-20% Tax for Service at the Restaurant or Hotel. This is so far a mandatory exercise and consumer has to bear the cost irrespective of the quality of the service. Now, the consumer has the option to pay for it. This is obviously a welcome change for the consumers. If you are not satisfied, you waive off the charge. Well, fight and scuffle can come up at the restaurant for few days considering the India trend in recent time.
For the Restaurants
To understand the situation, one must go back to the era of Tip. There was hardly any person who used to pay for some amount in return of the service. Well, people have got more money now and many do not mind paying for the Service Tax but the reality is many will not pay it. So, the restaurant owners are set to lose hefty amount as Service Tax.
Is there any sense? Well, definitely! Serve the customers better to get the amount afterall it is Hospitality Services and one can’t earn without good service.
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