• Fri. Jun 21st, 2024

What is Law on Service Tax Charged by Restaurant?

Samuel Hall

BySamuel Hall

Feb 23, 2023
Tax Charged by Restaurant

Service tax is a type of tax that is charged by a restaurant for the services provided to customers. It is an indirect tax that is levied by the government of India on various services, including restaurant services. The current rate of service tax charged by restaurants is 18%.

Tax Charged by Restaurant
Tax Charged by Restaurant

In India, the service tax on restaurant services was introduced in 2012. Prior to this, only Value Added Tax (VAT) was applicable to restaurant services. However, with the introduction of service tax, restaurants had to pay both VAT and service tax on the services provided.

The service tax charged by restaurants is applicable on the total amount of the bill, including the cost of food and beverages, as well as any other charges such as service charges, packing charges, etc. However, it is important to note that the service tax is not applicable to the tips given by customers to the restaurant staff.


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Restaurants are required to register for service tax and obtain a Service Tax Registration Number (STN). Once registered, they are required to charge service tax on their services and deposit it with the government. Failure to register for service tax or deposit the tax with the government can result in penalties and legal action.

It is important for customers to check their bills carefully to ensure that the correct amount of service tax has been charged. In case of any discrepancy, customers can bring it to the attention of the restaurant management and ask for a corrected bill.

In conclusion, a service tax is a tax charged by restaurants on the services provided to customers. It is an indirect tax that is levied by the government of India and is applicable to the total amount of the bill. Customers should check their bills carefully to ensure that the correct amount of service tax has been charged, and restaurants should ensure that they are registered for service tax and depositing the tax with the government.

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Samuel Hall

Samuel Hall

Samuel Hall, a renowned name in the world of finance and wealth management, has devoted more than two decades to understanding the intricacies of the financial realm. As the chief contributor to WealthServing, Samuel has enlightened thousands with his insights on wealth accumulation, risk management, and smart investment strategies.