Service Charge are provided by the Restaurant owners for the services which are provided by the restaurant rendered by serving food to their customer properly the main motive of the restaurant owner is to satisfy their customer. The service charge is not paid to the government it will be collected only for the restaurant owner itself.
The charge will be collected optional as per the wish of the restaurant owner and they can get free of any charges as per there service provided to their customers. Service charges vary from different restaurant which is normally in the range of 5% to 10 %. In restaurant they provided charge of only in the dine-in not for home delivery services.
We go for a restaurant not only to eat, we will alive for some hospitality services. Now-a-day restaurant collecting charges for separated part of services which are the provided and the tax is collected from the central government. The food cost will be displayed in the menu card and they get payment according to that. As per the cost of services the cost of food will be varied.
Vat on food: (Value Added Tax)
Vat food is only for the packed food or drinks and packed water bottles. As per the vat charge will be get only for the food which will be prepared by the restaurant. As per the restaurant rules 40 % is charged for service tax and 60% will be charged for Vat on foods. Service tax, which be formed by the central government and the state government will be formed of Vat tax.
Customer spending tax is known as Vat. Vat charges will be allocated as per the food cooked and sold in restaurants. Tax will be allocated based on two processes on vat tax other on service tax. Charges will be provided for the servant, staff in the hotel, serving the food, cleaning the table eats.. Some restaurant will be get fees for their service and some will not get.
Vat charges will be only for food in hotels as per the rate will be fixed for respecting states by the state government. The customer may pay tax as per their stay in luxury restaurant which may various with A/C or non a/c rooms and the room delivery services. The restaurant may get charged as per the use of the E – bill and water usage.
I hope this article will provide you to get a clear idea about service tax and charges at restaurants and vat tax on food.