Taxes and Charges in Restaurants

Taxes and Charges in Restaurants

Whenever you check a bill of a restaurant, there are many Taxes and Charges in Restaurants which are included in the total amount and the bill almost inflate from 15% to 20%. Many of us do not know about these extra costs. Let us know about these terms that we see on our food bill.

Service charge

This charge is for the service rendered by the restaurant. Most restaurants charge it, but there are few who don’t. There are no guidelines defined by the tax authority, so it varies between 5% to 10%. It is equivalent to the tip given to a waiter. There is no need to pay tips if the service charge is already charged.

Service tax

Taxes and Charges in Restaurants

People usually get confused with service tax and service charges. Service tax is that the tax levied by the government. On the services rendered by restaurants. Service tax is that the same in all states. It is 12.36% on 40% of the bill. The eating house should be air conditioned. Many people are taxed at the total bill and not on the 40% of the bill as directed.

VAT (Value Added Tax)

Value added tax is another tax referred to as VAT that varies according to any of the states. The rates are as low as 5% and as high as 20% relying on the states. Also, VAT for eatables and drinks is totally different. Several restaurants may club these two together to charge a flat rate on the full bill. In such cases, one should ask for separate bills for food and drinks that clearly show the various VAT for each of the things.


Most of the times, we have a tendency to do nothing about overcharging. Although, you can question this stuff and obtain your corrected bill. Please keep in mind that this cannot be straightforward. However, if you continuously question and justify this to the eating house manager and obtain a corrected bill. There are cases when customers were able to cut back their bills.

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