Tag Archives: Central Government

The Department of Consumer Affairs, Central Government has called for clarification from the Hotel Association of India, which have replied that the service charge is completely discretionary and should a customer be dissatisfied with the dining experience he/she can have it waived off. Therefore, it is deemed to be accepted voluntarily. The Department of Consumer Affairs has asked the State Governments to sensitize the companies, hotels and restaurants in the states regarding aforementioned provisions of the Consumer Protection Act, 1986 and also to advise the hotels/restaurants to disseminate information through display at the appropriate place in the hotels/restaurants that the ‘service charges’ are discretionary/ voluntary and a consumer dissatisfied with the services can have it waived off. A number of complaints from consumers have been received that hotels and restaurants are following the practice of charging ‘service charge’ in the range of 5-20%, in lieu of tips, which a consumer is forced to pay irrespective of the kind of service provided to him. The Consumer Protection Act, 1986 provides that a trade practice which, for the purpose of promoting the sale, use or the supply of any goods or for the provision of any service, adopts any unfair method or deceptive practice, is to be treated as an unfair trade practice and that a consumer can make a complaint to the appropriate consumer forum established under the Act against such unfair trade practices.

In view of the exemption notification issued by the Central Government, no Krishi Kalyan Cess (KKC) has been applicable on service completed on or before May 31, 2016, and invoices for such service issued on or before May 31, 2016. KKC was introduced vide Section 161 of Financial Act, 2016 @ 0.5% on the value of all or any taxable services. Central Government by way of a notification dated June 23 has exempted taxable services with respect to which the invoice for the service has been issued on or before  May 31, 2016, from the whole of Krishi Kalyan Cess leviable thereon, subject to condition that the provision of service has been completed on or before the May 31.

The Central Government has notified travel serivce providers that it has exempted service tax on religious pilgrimage for Kailash Mansarovar, Haj Yatra or pilgrimage facilitated by the Ministry of External Affairs, Government of India, between July 1, 2012 to August 19, 2014. A notification was issued to TAAI members on September 2, 2014, specifically exempting service tax on services provided by specified organisations in respect of religious pilgrimage for Kailash Mansarovar, Haj Yatra or a religious pilgrimage facilitate by MEA, GoI, with effect from August 20, 2014. However, for the period from July 1, 2012 to August 20, 2014 service tax was applicable on the aforesaid services but due to common practice prevalent during that time, no service tax was paid on the services.

The Minister of Civil Aviation Pusapati Ashok Gajapathi Raju welcomed the budget provisions aimed at reviving the unserved and under-served airports in the country for increasing regional connectivity. The Union Budget 2016 provides that the Central Government will partner with the State Governments to develop some of these airports and airstrips in the country. The Minister shared the action plan for revival of such airports. In the financial year 2015-16, Airport Authority of India (AAI) proposes to revive 10 non-operational airports. These airports are initially unviable and would require budgetary support from the Government. He said that Service Tax exemption under Deen Dayal Upadhyay Grameen Kaushalya Yojana will enable, firstly, training providers to set up training institutes across the country. Secondly, it will attract youth for cargo and ground handling from rural areas of the country. Exemptions for assessing bodies empanelled centrally by Directorate General of Training will also promote setting up of training institutes and attracting youth towards civil aviation sectors. About the increase of Excise Duty on Air Turbine Fuel from 8% to 14% the Minister said that the decrease in ATF base price over the last 13 months is around 25.04%. The increase in ATF prices due to increase in excise duty from 8% to 14% comes to around 6.56%. He said that the Budget 2016-17 has paved the way for developing India as a Maintenance, Repair and Overhauling (MRO) hub of Asia.