Ludhiana:Cashing in on unwary customers, restaurants as well as eateries across the city for years have been fleecing them by charging taxes on packed food items and drinks that have a fixed maximum retail price (MRP), all under the nose of the district administration. Restaurants claim that they “legally” charge service tax on these items but fail to give a justification over the excessive cost of food items at their eateries. The service tax is charged at 12.36% at restaurants and hotels. Since the directions from the ministry of consumer affairs in 2006, the practice is considered illegal.
However, with no check in place, several restaurants continue to indulge in the malpractice. According to the department of food supplies and consumer affairs, an item cannot be sold on a rate higher than its MRP. When DP team conducted a survey and visited some restaurants randomly, it was found that restaurants and eateries brazenly levied taxes on even packed food items. Shockingly, some restaurants, food courts at malls and multiplexes charge as much as `64 for a water bottle that is available at a cost of `20 in the market. ‘Kwality restaurant ‘, a restaurant at Sarabha Nagar, charged this excessive amount from this DP team.
Besides, several hotels in the city are getting water bottles without a printed price on them, enabling them to charge customers at their will. However, an advocate of central excise department has blasted the claims of the restaurants and shopping malls stating that service tax of 12.36% could be charged only if a service was involved in the purchase. The tax could not be charged if these items are bought from the counter, a claim that could put the restaurant owners and shopping mall in a dock. However officials of concerned department failed to raid over the rampant exercise done by different restaurants and eateries who are harassing customers through illegal tax.