Wednesday, November 21, 2012

Did you know about this.. SERVICE TAX.


About Service Tax..... how the restaurants loot your money ... Be aware

This happened at the restaurant. Let me explain.

We had been to several restaurants recently. I observed that  "service
tax" has been mis-used and charged to the customers like you and me.

Let me give an example.

Food and Beverage =            Rs. 1000.00

Service  Charges @ 10% =    Rs.  100.00    (10% on the Food and
beverage amount)

Service Tax @ 4.94% =        Rs.    54.34    (4.94% on F&B + Service Charges)

VAT @14.5% =                      Rs.  145.00

Total =                                    Rs.1299.34

As per the definition - "Service Tax can be charged only for the
services provided to the customer".

Now, see what is happening here in the above said  example.

Service Tax should be charged only on the Service Charges amount i.e
Rs.100 and not on the entire amount (1000+100).

In this example, the customer should be charged only Rs 4.94, whereas
he  has been charged Rs. 49.00 extra.

Where does this money go? Only the restaurant owner and the chartered
accountants who work for them know.

So, I have started asking them the questions - and surprised to see
the  reactions from the famous restaurants. Either they say: Sir we
cannot change the format of the bill - so , we will recalculate and
tell you the revised amount. You may pay only that.

Sir, you do not need to pay the Service Tax amount itself

I now have 3 to 4 restaurant bills, for which I have paid only the
service tax - on the service charges and not on the total amount.

Every bill must carry the TIN number and Service Tax  Number, if they
charge it. So, I ask for the Service tax number if it is  not
available in
the receipt that they provide.

We cannot go to any  government official and ask them to get this
right - because of our  system.

Please remember - we cannot change any political leader - but we  can
change ourselves. If we change ourselves - things will change.

Ask for the right tax calculation and pay only the tax which is
supposed to be paid. Verify every bill and receipt that you make
payment on.

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