Service-charge by hotels and restaurants is unfair

At a time when political rulers at the centre regularly boast about their strong action against wrong-doings, it is surprising that Union Minister of Consumer Affairs accepted helplessness of central government against many restaurants and hotels still charging service-chare despite the ministry-warning of  taking service-charge as unfair practice. Now taking the matter with Central Board of Direct Taxes (CBDT) by the ministry to assess service-charge in taxable income will still give minimum 70-percent income even if maximum 30-percent slab of Income Tax comes as revenue-earning. Eateries will best utilise costly legal talent to challenge service-charge being assessed in income. Fake cash-vouchers signed by staff can then be presented to evade any such taxation-tactics by the government. Otherwise also if eateries are really sincere for staff-welfare, they can increase their wages at their own. Also since there is no limit on served food-prices, they can increase prices rather than adopting back-door route to fool consumers by levying unfair service-charge.

Union Ministry of Consumer Affairs which often gives costly newspaper-advertisements, should launch a massive campaign educating public to bring matter of charging service-charge to some special cell set up for the purpose. Law may be tightened for incorporating prison-provision for owners of eateries levying unfair service-charge in bills. Rather paying and accepting tips otherwise also may be made an offence since gifts and tips are polished form of bribes.








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