Refused to Pay Service Tax – Restaurant Manager Flustered

Do Customer Need to Pay Service Tax in restaurants? How and Where Can People Report?

Is Service Tax still Mandatory? We were promised that the next time we go out to a restaurant, we would not be paying the service tax. Consumers basically have the option to pay or not to pay the service tax, says the Department of Consumer Affairs, confirming that the service charge added by the restaurants on top of the GST is completely optional.

“A number of complaints from consumers have been received that hotels and restaurants are still following the practice of levying ‘service tax’ between 5-20%, in lieu of tips, which a customer is obligated to pay irrespective of the manner of service rendered.

Preeti was charged 7.5 Service Tax at Golden Dragon Restaurant in Delhi


Preeti, who went to Golder Dragon Restaurant in Delhi after the implementation of GST was charged a service tax of 7.5%. Upon getting the bill, she informed the restaurant staff that service tax was now optional and she would not like to pay it. Upon hearing this, the restaurant attendant went to the manager who looked flustered and unhappy and came for a conversation. He stressed, that most restaurants are still charging service tax and this was part of the billing process. When promoted that if he could say that on the video, the manager promptly went inside and revised the bill.

All Hotels and restaurants must clearly communicate the message ideally through a display system that the ‘service charges’ are optional. The consumer can still go ahead and pay the tip to the serving staff, but the service charge cannot be forced on to a customer.

Unhappy about being charged Service Tax in a Restaurant? Report Your News, Reviews or Consumer Complaints to Eurasian Times.