Mumbai: Observing that charging a service tax and Goods and Service Tax (GST) at the same time is illegal, a consumer court ordered a Powai-based restaurant to repay Rs 165 charged separately for services to a Ghatkopar resident.
A full bench of the court headed by chairperson RG Wankhade also ordered the restaurant – Mini Punjab’s Lakeside, Restaurant & Banquets to pay Rs 10,000 towards compensation for the trauma that the family was subjected to throughout the litigation.
The order was pronounced over a complaint filed by Manisha Banavalikar, who had been to the restaurant along with her family in October 2017.
According to Banavalikar, after having dinner at the hotel, the family was given a bill of Rs 2,142. On enquiry, she was informed that the total amount of the meals was Rs 1,650 along with 10 per cent service tax, which was calculated to Rs 165. The family was further informed that an additional Rs 327 was charged as 18 per cent GST.
Having been informed, Banavalikar objected to the charging of Rs 165 as a service tax, arguing that the same is included in the 18 per cent GST charge. The hotel management, however, refused to accept her contention and asked her to make the payment as reflected in the bill.
After paying the bill amount, as asked by the hotel, Banavalikar petitioned the consumer court. She argued that the service tax of 10 per cent cannot be charged separately as it is inclusive in the 18 per cent GST.
The argument was vehemently opposed by the hotel as they justified the imposition of a separate service tax.
The full bench also comprising of members SV Kalal and SK Shere, after hearing the contentions, ruled, “We are of the considered opinion that the service charges are included in the 18 per cent GST charge and levying an additional 10 per cent tax for services, is not correct and is illegal.”
