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Include compulsory service charges by hotels, restaurants in I-T assessment, Centre tells CBDT

Union Food Minister Ram Vilas Paswan said that in April, guidelines had been issued to eateries not to levy such charges.

The Centre has asked the Central Board of Direct Taxes to include compulsory service charges, levied by restaurants and hotels on customers, in the assessment of income tax.

“Due to the seriousness of the issue, the Department of Consumer Affairs has written to the CBDT to consider inclusion of the service charges while assessing tax,” Union Food, Public Distribution and Consumer Affairs Minister Ram Vilas Paswan said on Twitter on Tuesday.

He added that guidelines were issued to hotels and restaurants in April to not levy a compulsory service charge. While appreciating the fact that many renowned hotels and restaurants had made service charges optional, Paswan said the ministry was receiving complaints about those who made these charges mandatory.

Paswan also said that the Centre had issued directions to officials of the Legal Meteorology department in all states to monitor the cases where restaurants charge customers in excess of the Maximum Retail Price. “Voluntary consumer organisations have been asked to increase awareness [among customers] and choose some cases [of charging above MRP] for exemplary remedial action,” the minister added.

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