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Service charge to be optional

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BENGALURU: The central government instructed the state governments that the payment of the service charge is optional and not mandatory on 2 January, 2017.

At the end of the meal, we are handed the bill with additional charges excluding the price of the food served. The other charges are; service charge, service tax, VAT (value added tax) and swachh Bharat cess.

The service charge is a way of making the customer pay tips for the service provided by the waiter. This charge is enforced by the restaurant and not the government. Until recent times this payment was compulsory. If the customer is not satisfied with the services provided, he/she can choose not to pay the additional service charge included in the bill which can vary from 5-20 percent depending on the restaurant.

Service charge and service tax are different. Service tax is levied by the central government whereas service charge is levied by restaurants. Service tax is derived from calculating only 40% of the total bill.

Nachiketh Shetty, the manager of ‘Anupam’s Wild Coast’ restaurant on Langford Road, said that “making the service charge optional is a bad idea because with the service charge, the waiters get their incentives and that motivates them to give their best in what they do. Now, we must increase their salaries to keep them determined and motivated.”

Shiva Kumar, the manager of ‘Meghana’s Biriyani’, Koramnagala, told that “we do not include service charge in our bills and so this decision does not affect us.”


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