Even though the UT administration in its October 31 order had warned the hotel and restaurant owners association of legal action in case they levy service charge, the excise and taxation department has not penalised even a single violator so for. However, the department officials claim sending notices to those not divulging tax details under the Value-Added Tax (VAT) Act.
The department had been receiving many complaints from city residents from almost every other day, but a month had passed and it had failed to take any legal action against the violators.
Excise and taxation department commissioner Bhalla said, “We are sending notices and we will impose penalty on eateries found levying service charge.”
HT had earlier also pointed out levying of service charge by Chili’s and other eateries, but officials claimed sending teams that did not find violations pointed out by the residents or the media.
City-based advocate Ajay Jagga had taken up the issue with the UT administration way back in 2006 and highlighted that different eateries were levying service charge. He had also complained to the UT administration and the ministry of consumer affairs that the service charge levied did not fall in the ambit of provisions of the VAT Act. The administration took note of his complaint and pointed out that levying the charge was illegal. This year again Jagga took up the issue with the administration after noticing the trend in the city hotels and restaurants, following which a fresh order was issued.