Rs 1.98 extra service tax costs Nando’s Rs 12,000!

Aneesha Sareen

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Tribune News Service

Chandigarh, January 6

Two popular food joints in the city are in the dock for miscalculating service tax and duping innocent customers. Finding Nando’s at Elante Mall and Swagath in Sector 26 guilty of duping gullible customers by miscalculating the tax, the UT Consumer Disputes Redressal Forum, in two separate orders, has directed Nando’s to shell out Rs 12,000 and Swagath to shell out Rs 14,000 for unfair trade practices.

In the first order, the consumer forum has directed Nando’s to shell out Rs 12,000 — Rs 7,000 as compensation and Rs 5,000 as the litigation costs — for unfair trade practices and for causing mental and physical harassment to the complainant. The restaurant has also been directed to refund Rs 1.98 charged extra towards service tax.

Similarly, the Swagath restaurant in Sector 26 is in the dock for charging service tax at the rate of 14 per cent, which is illegal as service tax is to be calculated at the rate of 4.94 per cent.

“Who knows how many innocent customers were forced to pay extra service tax illegally in this manner? So, in our opinion, if Nando’s has charged service tax in excess, it amounts to unfair trade practice, which resulted in mental agony and harassment to the complainant,” the forum said.   

According to the complaint, on May 30, 2015, the complainant, Krishan M Vohra, a resident of Sector 7, Panchkula, along with his friend, went to Nando’s at Elante Mall to have lunch. It was noticed that the restaurant charged Rs 1.98 extra towards service tax at the rate of 5.43 per cent instead of 4.94 per cent on the total bill amount. He moved the consumer forum alleging unfair trade practice.

The forum stated that despite getting ample opportunity, the restaurant could not clarify these calculations of service tax done wrongly.  

In another case, Shano Solanki, a resident of the NITTTR campus, Sector 26, reported that she went to Swagath in Sector 26 for dinner. It was alleged that the restaurant overcharged the complainant with respect to the calculation of all taxes.

“The Swagath restaurant, in its reply, has clearly mentioned that it had charged service tax at the rate of 14 per cent on 40 per cent of the total value of the food item and service charge. However, it has not placed on record any authentic document with regard to the same. Though it has been contended by the opposite party that it is depositing VAT and service tax with the government, there is no clear explanation with regard to the fact as to why service tax has been charged at the rate of 14 per cent instead of 4.94 per cent? Therefore, the act of the opposite party in fleecing the gullible customers by overcharging on the bill by levying charges wrongly tantamounts to rendering deficient services to the complainant. 

“The opposite party is putting additional burden on the consumers, who already have to pay around 25 per cent taxes in the form of VAT at the rate of 12.5 per cent and service tax  at the rate of 4.94 per cent. It is, thus, legitimately, proved that the opposite party had resorted to unfair trade practice in collecting the excess amount and had failed to return the same, which resulted in mental agony and harassment to the complainant,” said the forum.