Service charge on bills illegal: C.V.Anand

Civil Supplies Commissioner C.V. Anand on Saturday convened a meeting with representatives of hotels association where he warned them that imposition of service charge on bills handed out to customers at hotels and restaurants was illegal.

Payment of service charge by customers was voluntary because it was supposed to be a tip for the service that they received from hotels and restaurants. But, a number of complaints were received in the National Consumer Helpline that hotels and restaurants included ‘service charge’ as a separate head in the bill to collect 5 to 20% of value of food items consumed in lieu of tips, a release said.

Therefore, Mr. Anand told the representatives, the bills may clearly mention service charge as voluntary. The space against the head ‘service charge’ in the bill may be left blank for the customers to fill and pay the amount that they quoted.

The legal metrology department would conduct raids on hotels and restaurants from Monday to check if the amount was continued to be collected despite Saturday’s firm instructions. Mr. Anand warned the representatives that tips or gratuity paid by customers towards hospitality received by them was a separate transaction between them and hotel staff at the discretion of customers.

Raids against GST frauds to be intensified

Legal Metrology Department has intensified the raids against GST fraud cases with the Commissioner for Civil Supplies and Legal Metrology Controller C.V. Anand ordering officials to make special and detailed checks on all the complaints for another week.

So far, 1,062 cases have been booked and Rs.10.62 lakhs penalty has been imposed while few more cases were in trail stage, Anand said in a press release issued here on Sunday. Most cases registered for charging GST on MRP were in Hyderabad and these include against Hyderabad Central Mall, PVR Cinemas, KFC, Mc Donald, Prasads Imax, Subway Food Court, Sujana Mall in Kukatpally, Blue Fox Restaurant, Shanbagh, Golconda Hotel and others, he said.

Stating that the department would continue to intensify action on the GST frauds, Anand said penalty from Rs.2,000 to Rs.25,000 would be levied against those caught for the first time for charging more than MRP with the penalty getting doubled for those caught the second time.

Complaints of GST frauds were coming not only about small traders but even big shopping malls and multiplexes. Charging GST on MRP, non GST items and selling on higher prices in the GST were reported in these raids. In last six days Legal Metrology Department conducted more than 5000 raids and made special and detailed checks in malls, multiplexes, star hotels, restaurants, bars, sweet houses and other business points, the press release added.