GST pe charcha: Chai tax rescinded

AHMEDABAD: After introduction of Goods & Service Tax (GST) in July, a highway hotel charged the tax from a car driver over two cups of tea. This did not go well with the driver and he successfully fought a legal battle to claim the meagre amount of Rs7.63 back.

A consumer court in Rajkot ordered the hotel owner to return Rs7.63 charged towards GST to the customer with 6% interest. Besides, the hotel has also been ordered to pay Rs1,500 to the customer for causing mental harassment and legal expenditure on the ground that it was deficiency in service the way billing was made to charge Rs50 for two cups of tea.

In this case, a resident of Raiyadhar locality in Rajkot, Mohitraj Rathod was driving a government official from Rajkot to Junagadh town on July 4. They stopped by Hotel New Ankur on the highway near Pithadiya village and had two cups of tea. The hotel charged Rs50 for two cups and the bill issued mentioned that Rs 7.63 was charged towards tax.

This taxation did not go well with Rathod, who raised objection and asked for explanation from the hotel management.

When his query on why tax was charged was not solved, he sued the hotel with the Consumer Dispute Redressal Forum at Rajkot, where the hotel management tried to justify the tax structure.

It said that it charged Rs 21 for a cup of tea and charged Rs 1.9062 towards SGST and equal amount towards CGST. Total amount for a cup came around Rs 24.9924 and hence, it charged Rs 25 per cup.

Thus, it charged Rs7.63 tax over two cups of tea. The hotel management submitted that GST was made applicable from July 1, and hence the tax was charged according to the norm. The consumer court questioned the hotel why its bill showed a consolidated amount of Rs 50, and a proper break up was not given.

The hotel tried to explain that since GST was recently introduced and computer in the hotel was being updated, it generated the bill with consolidated amount. The court concluded that the bill mentioned total tax, but there was no description of the rate on which GST was charged and hence raising such a bill is a deficiency in service.