LCI Learning

Share on Facebook

Share on Twitter

Share on LinkedIn

Share on Email

Share More

Ranganadhan (SSE)     26 June 2013

Service tax in restaurant


I have a confusion regarding the service tax applied to me in restaurant. I have explained below the calculation. Please answer my queries.

We went to a restaurant as a team in Chennai. We ate some veg and nov-veg food items. We got the below bill amount.


Bill Amount                : 12000.00

Service Charge        :      480.00

Service Tax               :      617.00


Total                          :  13097.00


Above total amount(13097.00) is what we paid.

Here service tax is calculated as (12000 + 480) * 40/100 *12.36/100 = 617.00

They calculated service tax on Bill Amount and Service Charge(12480.00). 

Actually they should have calculated service tax on only Bill Amount(12000.00). It should have been 12000 * 40/100 * 12.36/100 = 593.00

I believe they charged extra Rs. 24/- . 

 Am I correct?





 2 Replies

Rama chary Rachakonda (Secunderabad/Telangana state Highcourt practice watsapp no.9989324294 )     27 June 2013

From the plain and simple reading of the provisins of the service tax law, one will simply understand that service tax can be levied only on the service portion of any activity, But generally the restaurant owners charge service-tax on the total bill rather than only on the service portion of the bill. For this restaurant owners are frequetly blamed by their customers.


Service tax is chargeable on the gross amount charged by the restaurant i.e. bill amount + service charge if any. As such in this case the restaurant has charged correctly.

Leave a reply

Your are not logged in . Please login to post replies

Click here to Login / Register