Good news for consumers: Centre asks to CBDT to consider service charge by hotels as income

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New Delhi | September 13, 2017 9:28 PM

Amid consumer complaints over hotels and restaurants still levying service charge, Consumer Affairs Minister Ram Vilas Paswan today said the CBDT has been asked to consider it as an income while assessing their tax returns.

Ram Vilas Paswan, Centre, CBDT, service charge, hotelPaswan said a number of renowned hotels and restaurants have made service charge “optional” under the guidelines. (PTI)

Amid consumer complaints over hotels and restaurants still levying service charge, Consumer Affairs Minister Ram Vilas Paswan today said the Central Board of Direct Taxes (CBDT) has been asked to consider it as an income while assessing their tax returns. At present, some hotels and restaurants are charging service charge in the range of 5-20 per cent, in lieu of tips, despite the government’s guidelines to make levy of such charge as optional.

In a statement, Paswan said a number of renowned hotels and restaurants have made service charge “optional” under the guidelines. They have been asked either to leave the column of service charge blank or mention on the bill that it is optional, he said.  “But still the complaints are being received through National Consumer Helpline. …In order to check the levying of service charge compulsorily, the CBDT has been asked to consider inclusion of service charge while assessing tax,” he said.

The Legal Metrology officers in all states have been directed to monitor the cases of charging more than MRP. That apart, the state governments have been asked to issue directions to hotels and restaurants to display the message at an appropriate place that service charge is completely optional.

They have been told to implement the guidelines strictly and sensitise consumers, he added.

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