Friday, September 17, 2021
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Unfair service-charges

At a time when political rulers at the centre regularly boast about their strong action against wrong-doings, it is surprising that Union Minister of Consumer Affairs accepted helplessness of central government against many restaurants and hotels still charging service-chare despite the ministry-warning of 21.04.2017 of taking service-charge as unfair practice. Now taking the matter with Central Board of Direct Taxes (CBDT) by the ministry to assess service-charge in taxable income will still give minimum 70-per cent income even if maximum 30-per cent slab of Income Tax comes as revenue-earning. Eateries will best utilise costly legal talent to challenge service-charge being assessed in income. Fake cash-vouchers signed by staff can then be presented to evade any such taxation-tactics by the government. Otherwise also if eateries are really sincere for staff-welfare, they can increase their wages at their own. Also since there is no limit on served food-prices, they can increase prices rather than adopting back-door route to fool consumers by levying unfair service-charge.

Union Ministry of Consumer Affairs which often gives costly newspaper-advertisements should launch a massive campaign educating public to bring matter of charging service-charge to some special cell set up for the purpose. Law may be tightened for incorporating prison-provision for owners of eateries levying unfair service-charge in bills. Rather paying and accepting tips otherwise also may be made an offence since gifts and tips are polished form of bribes.

 

Madhu Agrawal

(The views expressed by the author in the article are his/her own.)

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