GST in hospitality sees troubles, consumers complain of multiple taxes, ‘informal’ bills

While some consumers complained of having to pay GST as well as other taxes, others expressed disappointment over receiving kuccha (handwritten) bills.

Written by Neha Kulkarni | Mumbai | Published:July 3, 2017 2:49 am
GST, GST in hospitality, multiple taxes, ‘informal’ bills, GST implementation, Mumbai News, Indian Express News Consumers will pay the tax with half charged as State GST (SGST) and half as Central GST (CGST). (Representational Image)

A DAY after the Goods and Services Tax (GST) replaced all other forms of indirect taxes, teething problems continued in levying the tax in the hospitality sector. While some consumers complained of having to pay GST as well as other taxes, others expressed disappointment over receiving kuccha (handwritten) bills. As per the revised norms, the tax has dropped from around 20 per cent to 18 per cent for dining at air-conditioned (AC) restaurants and 12 per cent for non-AC restaurants, from around 14 per cent.

Consumers will pay the tax with half charged as State GST (SGST) and half as Central GST (CGST). The new rule also prescribes charging 18 per cent tax for non-AC compartments in restaurants that have both sections. Consumers have raised queries over being asked to pay a service charge on compulsory basis in certain eateries. “While I was charged both the forms of GST, they also levied a service charge of 5 per cent on my total food bill. When I raised questions against it, the authorities informed me that they have been asked to charge the tax by their financial advisers. I was miffed, but had to pay the cost as there was no other option,” said Paankaj Shurewala, who had dined at a popular eatery in Goregaon.

When The Indian Express contacted the outlet, a staff there said, “This could have been an honest mistake. Paying a service charge is not mandatory for the consumer and we regret it.” By Sunday evening, many consumers had uploaded food bills on social networking sites to complain about being charged VAT along with GST on certain services. Others complained of paying higher after being charged 12-18 per cent of the total cost. “We had ordered food on Saturday from Sairaj restaurant, for which the GST rate was included separately in the bill. However, we did not find the bill pucca and raised questions against it. The person concerned told me that as they are yet to get registered under the new system, a handwritten bill was sent,” said Rohit Raina, Kandivli resident.

“We had given informal bills to our customers only on Saturday. as we were advised to do so till we get registered under GST. As we had not been registered till Saturday night, we stopped charging any form of taxes on the total bill to avoid confusion and problem,” said Tulsi Gaikwad, manager, Sairaj restaurant. Others complained of being charged 18 per cent GST in non-AC restaurants. “I was upset as certain non-AC restaurants charged me 18 per cent GST. This shows the state of complete confusion prevailing in the city’s hotel industry,” said Pawan Mishra, a consumer.

“We are having a tough time telling consumers that they will be charged 18 per cent while sitting in non-AC sections of restaurants that have both divisions. They claim we are not following the rules, when we are actually doing so,” said Samir Shetty, owner of Sandeep restaurant in Kanidvli East. The Indian Hotel and Restaurant Association (AHAR) said the problems would take some time to be ironed out.

“It is unfortunate that concerns of kuchha bills and service charges have emerged, when sufficient seminars were undertaken to inform the stakeholders of the differential pricing. We think these problems will continue to exist till the system gets updated,” said Adarsh Shetty, president, AHAR. “As far as differential pricing for AC and non-AC compartments is concerned, we had met authorities in both the state and central government against this. As AC is a necessity more than a luxury, consumers’ concerns are valid,” Shetty added.

“I will write to the Ministry of Consumers Affairs about this. Charging other taxes along with the GST is unethical and due action must be taken,” said S K Virmani, consumer activist associated with Jaago Grahak Jaago movement of the government.

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  1. S
    Shekhar
    Jul 3, 2017 at 1:44 pm
    Can we have a separate media cover only on GST till 10th of July. This shall also solve lot of genuine queries which otherwise cannot be addressed to.
    Reply