Confusion among citizens about pricing and billing at restaurants

Rujuta Parekh
Saturday, 15 July 2017

Speaking on the issue, a city-based working professional said, “Restaurants charge much over the MRP for the bottle of water or bottle of soft drink. Adding to this, GST is charged on the total bill which includes these products.

PUNE: As citizens are trying to understand the newly rolled-out Goods and Services Tax (GST), a lot of questions and queries are coming up, especially with regard to restaurants bills. A lot of discussions have been happening online as well as offline about charging of GST on bottled water and aerated or non-aerated drinks at restaurants. 

Many people have uploaded restaurant bills on the social media followed by discussions stating that restaurants are cheating their patrons by charging extra on these bottled products carrying Maximum Retail Price (MRP) and adding GST on the same. 

Speaking on the issue, a city-based working professional said, “Restaurants charge much over the MRP for the bottle of water or bottle of soft drink. Adding to this, GST is charged on the total bill which includes these products. People believe that this is not fair to the consumers as a bottle of water is priced at Rs 20 (MRP), which includes GST. It is not clear whether it is legal for restaurants to add these extra charges, which has led to doubts of being cheated.”

Clearing doubts that have arisen in the minds of people, Deputy Commissioner, Central GST, Rajlaxmi Kadam said that restaurants can charge GST on these products. “When you order a bottle of water or aerated drinks at a restaurant, they are charging GST not on the product but on the service they are providing. So, a non-AC restaurant can charge 12 per cent while an AC or alcohol serving restaurant can charge 18 per cent GST on the total bill value which includes the bottle of water or soft drink,” she said.

However, she also mentioned that restaurants cannot charge the customers over the MRP on these products. “If a bottle of water carries an MRP of Rs 20, the restaurant cannot charge beyond the MRP and then levy GST on that. It is illegal to charge over the MRP, which is inclusive of taxes. Such cases must be reported,” Kadam added.

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