SERVICE TAX – ….. how the restaurants loot your money in Sri Lanka … Be aware
Posted on November 21st, 2012

This happened at the restaurant. Let me explain.

ƒÆ’-¡ƒ”š‚ We had been to several restaurants recently. I observed that ƒÆ’-¡ƒ”š‚ “service tax” has been mis-used and charged to the customers like you and me.

ƒÆ’-¡ƒ”š‚ Let me give an example.

ƒÆ’-¡ƒ”š‚ Food and Beverage = ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ Rs. 1000.00

Service ƒÆ’-¡ƒ”š‚ Charges @ 10% = ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ Rs. ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ 100.00 ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ (10% on the Food and beverage amount)

Service Tax @ 4.94% = ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ Rs. ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ 54.34 ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ (4.94% on F&B + Service Charges)

VAT @14.5% = ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ Rs. ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ 145.00

Total = ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ ƒÆ’-¡ƒ”š‚ Rs. 1299.34

ƒÆ’-¡ƒ”š‚ As per the definition – “Service Tax can be charged only for the services provided to the customer”.

ƒÆ’-¡ƒ”š‚ Now, see what is happening here in the above said ƒÆ’-¡ƒ”š‚ example.

ƒÆ’-¡ƒ”š‚ Service Tax should be charged only on the Service Charges amount i.e Rs.100 and not on the entire amount (1000+100).

ƒÆ’-¡ƒ”š‚ In this example, the customer should be charged only Rs 4.94, whereas he has been charged

Rs. 49.00 extra.

ƒÆ’-¡ƒ”š‚ Where does this money go? Only the restaurant owner and the chartered accountants who work for them know

ƒÆ’-¡ƒ”š‚ So, I have started asking them the questions – and surprised to see the ƒÆ’-¡ƒ”š‚ reactions from the famous restaurants. Either they say: Sir we cannot change the format of the bill – so , we will recalculate and ƒÆ’-¡ƒ”š‚ tell you the revised amount. You may pay only that.

ƒÆ’-¡ƒ”š‚ Sir, you do not need to pay the Service Tax amount itself.

I now have 3 to 4 restaurant bills, for which I have paid only the service tax – on the service charges and not on the total amount.

Every bill must carry the TIN number and Service Tax ƒÆ’-¡ƒ”š‚ Number, if they charge it. So, I ask for the Service tax number if it is ƒÆ’-¡ƒ”š‚ not available in the receipt that they provide.

ƒÆ’-¡ƒ”š‚ We cannot go to any ƒÆ’-¡ƒ”š‚ government official and ask them to get this right – because of our ƒÆ’-¡ƒ”š‚ system.

ƒÆ’-¡ƒ”š‚ Please remember – we cannot change any political leader – but we ƒÆ’-¡ƒ”š‚ can change ourselves. If we change ourselves – things will change.

ƒÆ’-¡ƒ”š‚ Please do share this with every one of your friends and known people.

ƒÆ’-¡ƒ”š‚ Ask for the right tax calculation and pay only the tax which is supposed to be paid. Verify every bill and receipt that you make payment on.

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