Skip to main content

Cesses, VAT behind high bills, not service charge


Govt Painting Us As Robbers, Say Hoteliers
The hospitality indus try on Friday hit out at Union minister Ram Vilas Paswan's announcement that service charge was optional, warning that such statements could kill the booming industry . The statement comes close on the heels of a court ban on serving liquor near highways. Just last week, the minister spoke about a plan to regulate portion sizes though he later clarified that the steps would have to be voluntary . ā€œThe government talk ed of ease of doing business but the question restaurant industry asking is, where is the guarantee of business,ā€œ fumes Riyaaz Amlani, president of National Restaurant Association of India (NRAI).

NRAI is planning to hold nationwide protest against these guidelines.ā€œThe government did not talk of high taxes such as VAT, Swachh Bharat cess, Krishi Kalyan cess and service tax but talked only of service charge. Rather than clarifying that heavy taxes are resulting in inflated bills, the government is showing that restaurateurs are robbing people in the name of service charge when it is used for benefit of staff,ā€œ he elaborates.

After the minister's initial announcement, restaurateurs TOI spoke with said there were already several instances of customers refusing to pay service charge stating their dissatisfaction with quality of services.While some simply waived off those charges, others held their ground and offered a discount equivalent to service charge rather than waiving it off.

Some customers pointed out that voluntary or not, they would pay up. Anita Arya, a business executive who eats out every weekend, says,ā€œWho will go to a restaurant and create a ruckus over a service charge only to completely ruin the evening with a fight? Most people will end up paying.'' Restaurateur Priyank Sukhija says he is well within his rights to ask for service charge as his menus clearly mention that charge. The service charge is an incentive for a waiter, a cleaner and a chef to offer a pleasurable dining experience, he adds.

Dilip Datwani, president of the Hotel and Restaurant Association of Western India (HRAWI), said it was sad to see constant demands being made from the hospitality industry on one issue or the other. ā€œService charge is a global practice and one that has been in force in India for more than half a century . The charge is neither hidden nor disguised.We cannot understand why we are being singled out,ā€œ says Datwani.

Ketan Gohel, co-founder, Brewbot Eatery & Pub brewery , pointed out that the service charge was necessary as India doesn't have a good tipping culture: ā€œService charge is a major chunk of gratuity which is paid to the staff at the end of the month along with their salaries. If the government plans to remove it, then the money the staff makes in this industry would reduce drastically. It will now become tough to hire competent labour for this industry .ā€œ

The Times of India New Delhi, 22nd April 2017

Comments

Popular posts from this blog

GST collection for November rises by 8.5% to Rs.1.82 trillion

  New Delhi: Driven by festive demand, the Goods and Services Tax (GST) collections for the Union and state governments climbed to Rs.1.82 trillion in November, marking an 8.5% year-on-year growth, according to official data released on Sunday. Sequentially, however, the latest collection figures are lower than the Rs.1.87 trillion reported in October, which was the second highest reported so far since the new indirect tax regime was introduced in 2017. The highest-ever GST collection of Rs.2.1 trillion was reported in April. The consumption tax figures highlight the positive impact of the recent festive season on goods purchases, providing a much-needed boost the industry had been anticipating. The uptick in GST collections driven by festive demand had been anticipated by policymakers, who remain optimistic about sustained growth in rural consumption and an improvement in urban demand. The Ministry of Finance, in its latest monthly economic review released last week, stated that I...

Budget: Startup sector gets new Fund of Funds, FM to allocate Rs 10K cr

  The Indian startup sector received a boost with Finance Minister Nirmala Sitharaman announcing the establishment of a new fund of funds (FoF) in the Budget 2025. The minister unveiled a fresh FoF with an expanded scope, allocating Rs 10,000 crore. The initial fund of funds announced by the government with an investment of Rs 10,000 crore successfully catalysed commitments worth Rs 91,000 crore, the minister said.   ā€œThe renewal of the Rs 10,000 crore commitment to the Fund of Funds for alternative investment funds (AIFs) is a significant step forward for the Indian startup and investment ecosystem. The initial Rs 10,000 crore commitment catalysed Rs 91,000 crore in investments, and I fully expect this fresh infusion to attract an additional Rs 1 lakh to Rs 1.5 lakh crore in capital,ā€ said Anirudh Damani, managing partner, Artha Venture Funds.   Damani further added that this initiative will provide much-needed growth capital to early-stage startups, further strengthenin...

RBI to weigh growth slowdown, inflation at its MPC meeting this December

  Despite GDP growth declining to 5.4 per cent in the Julyā€“September quarter, the Reserve Bank of Indiaā€™s (RBI) six-member monetary policy committee (MPC) is expected to maintain the current repo rate during its review meeting this week, according to a Business Standard survey of 10 respondents. Among the respondents, only IDFC First Bank forecast a 25-basis-point (bps) reduction in the repo rate. Since May 2022, the RBI has raised the repo rate by 250 bps to 6.5 per cent as of February 2023 and has held it steady across the last 10 policy reviews. The latest GDP figures, published on Friday (November 29), showed that growth for Q2 FY25 slowed to 5.4 per cent year-on-year, down from 6.7 per cent in Q1. Most survey participants suggested that the RBI might revise its growth and inflation projections for the financial year. The poll indicated that the central bank could lower its growth estimate from the current 7.2 per cent and increase its inflation forecast, currently at 4.5 per c...