Calculation of service tax and vat

[Atul Anand]

I am running a restaurant. I am charging VAT 12.5% on sale of food. but I am not charging VAT on service charges provided by us. For example: I am suppling food of Rs.2496.00. charge VAT 12.5% on Rs.2496.00 is Rs.312.00. I am also charging 10% service charges on Rs.2496.00 is Rs.249.6 . On what amount I should charge the VAT on Rs.2496.00 or Rs.2496+249.6. What is correct?

AI Summary

Restaurant Owner Advised to Include Service Charges in VAT Calculation for Food Sales at 12.5% Rate A restaurant owner inquired about the correct calculation of VAT on food sales and service charges. The owner charged 12.5% VAT on food but not on service charges. Experts advised that VAT should be calculated on the total amount, including service charges, as they form part of the food's price. One expert noted that only VAT applies, not service tax, and should be levied on the combined total of food and service charges.