Many UT eateries evade VAT

PUDUCHERRY: A lot of restaurants serving continental food and catering to the large chunk of foreign visitors coming to Puducherry have mushroomed in the town. The ambience of Puducherry’s Fre

PUDUCHERRY: A lot of restaurants serving continental food and catering to the large chunk of foreign visitors coming to Puducherry have mushroomed in the town. The ambience of Puducherry’s French Precinct evokes the feelings one gets while visiting a historic European city and this combined with the pleasant weather conditions is one of the reasons for attracting  visitors to Puducherry.

Capitalising on this trend some of these restaurants, mostly run by foreign nationals and specialising in  French, Italian, American, Vietnamese food,are raking in the moolah.   

Basically  these restaurants are in the main town area and have almost houseful in the evenings. The clientele is predominantly foreign and some Indian tourists and  wealthy locals enjoy the food along with alcoholic drinks.

However, they do not give a proper bill on the charges of food and drink consumed, ultimately depriving the government of their tax dues.

On the bill provided to the customers, there is no name of the restaurant, its address,  TIN number (under which the restaurant is registered with Commercial tax department for payment of VAT),  VAT charged on the food,    service tax charged, date of sale as well as there is no signature of the cashier mentioned. The bill  is given  with only the amount charged and the item consumed.  

When an Express staff had a chicken pasta  at a roof top restaurant on Labourdonnais Street and asked for the bill, the amount of `190 was written on a page from a bill book (purchased from a stationary shop)  along with the item’ name chicken pasta, and there were no other details. The same experience has been re-lived at an Italian restaurant,  a pizza shop on Mission Street and at a restaurant on Lal Bahadur Shastri Street.

In one of these restaurants when a consumer expressed surprise on being presented a bill with only the items consumed- pork roast and lime soda worth `300 and asked “This is a bill?” the bearer quipped, “Oh, you mean you want  a computerised bill?“  The consumer replied in the affirmative to which the bearer  informed him that he would have to pay `33 extra for the computerised bill. The consumer agreed and he was given a bill with the name of the restaurant, date and  by adding `32.25 as VAT charges, rounded off to `33.  He ended up paying `333 instead of the earlier charge of `300.

 As there is no proper bill, there is certainly evasion of tax payable both to Puducherry government and central government (Service tax of Central Excise).

Most of the foreigners are not bothered about a  bill. Even  the visiting Indians do not go deep into  the bill aspect but generally ask for one to pay the charges and do not reflect on the aspect of an improper bill.  

“Whatever be the system, there will be tax evaders. The government should periodically check and make the enforcement strict to bring on board the tax evaders as was the norm in neighbouring states including Tamil Nadu,” said a prominent hotelier on Tuesday.

While most of the time an improper bill is given for the food consumed, there is no mention of liquor in the bill.“We cannot give bill for liquor consumed,” was the reply by a waiter at a prominent restaurant.  Since these restaurants have  obtained licence under tourism category to serve liquor, it is not mandatory to sell liquor at the MRP rates  and the MRP rates need not be  pasted on the bottle. Taking advantage of this even liquor is charged heavily when served either in bottle or in pegs.

Now with the government enhancing the VAT on several items including cooked  food, which had gone up from two to 10 per cent from January 1, this tax evasion would mean a loss of revenue to a great extent.

The hotel industry which has been  hit by the VAT hike and has been agitating demanding the roll back of the VAT hike had petitioned the chief minister. “Those with an annual turn over of below `1 crore, the tax should be waived off, while for other small restaurants and hotels the tax should be a flat rate  based on the turnover,” said K Sudhakar, president of small hotel and restaurant association.

However, he accepted that a good number of  restaurants were not complying with the tax requirements by way of registering with the Commercial tax department (TIN)  or paying tax as per the provisions for the fear of losing business.  

But  some of these continental restaurants are least bothered and are thriving through tax evasion. When the Commissioner of Commercial Tax department L Kumar was contacted on Monday evening in this regard, he said that he would look into it.

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