Some restaurants in Mumbai charging GST and VAT

Mumbai city news: While some restaurants are yet to do away with older taxes like value added tax and service tax, others have added new taxes, taking advantage of the confusion after the GST.

After the GST roll-out, Mumbaiites are falling prey to inflated bills at different restaurants.

According to the changes in the tax regime, the 6% tax on liquor has been abolished after the introduction of GST. (HT)

While some restaurants are yet to do away with older taxes like value added tax and service tax, others have added new taxes, taking advantage of the confusion after the GST.

According to the GST system, air-conditioned (AC) restaurants can charge 18% tax, while non AC restaurants are supposed to charge 12% tax.

“I was shocked to that the tax tab had additions that I was not supposed to pay under the GST regime. The restaurant charged me 10% service charge and 6% liquor VAT with the GST ,” said a 23-year-old social media manager who dined at a resto-bar in Bandra.

According to the changes in the tax regime, the 6% tax on liquor has been abolished after the introduction of GST.

The experience was similar for Sonal Panchal, a marketing professional from south Mumbai. “Over and above GST, we were asked to pay service charge, not to mention the VAT. When we inquired with the manager, he said the taxes were in line with the government rules and refused to do away with them,” she said.

Officials from Indian Hotel and Restaurant Association (AHAR) said that adding service charge to the bill is at the discretion of hoteliers but adding GST to the service charge is maybe a procedure suggested by chartered accountants to balance accounts. “It’s not an issue and will be sorted out as the final GST rates are out. At the same time, we have to charge VAT on liquor because it’s not a part of GST,” said Shetty.