Minister for Roads and Transport Dharmana Prasad Rao informed the State Legislative Council that several hotels in the State including Star Hotels in Hyderabad have been collecting the service charges on the food items from the customers.
Replying to a question raised by D Rajaseshwar Rao, he said that it was also an fact that VAT was imposed even on the service charges. Disclosing the reasons, he said the sale price of food item, including service charges, if any, mentioned in the bill of sale was liable to VAT under Section 4(9) of AP Vat Act. (INN)