How can you reduce your restaurant bill
You planned a relaxing lunch at your favorite restaurant with your family. The grandparents are enjoying themselves. Your children’s’ chatter is rewarding. This is a perfect watershed moment for the memory box in your heart. Then the bill comes. You are shocked. The bill is much higher than you expected. What do you do? Should you complain to management or just let it go? Up to this point, your family dining experience has been euphoric.
There are tips to reduce your restaurant bill. The Economic Times wrote an article “Paying an inflated bill at restaurants? Tips to reduce extra charges.” Let’s start with a few items you see on your bill but often do not understand.
Restaurants charge a service charge for the service they give you. Tax authorities don’t provide guidelines for this charge. Therefore, establishments are free to charge what they want to charge and this is usually between 5 percent to 10 percent. Not all restaurants charge it. This service charge is equivalent to tips paid to waiters. So, if you see this charge on your bill, don’t pay a tip. Service charges are supposed to be shared among the staff. If the menu mentions a service charge, you must pay it. If it doesn’t, you may question it.
A charge often confused with the service charge is service tax.
“Service tax is the tax levied by the Government on the services rendered by restaurants. Service tax is same in all states. It is 12.36% on the 40% of the bill. The bill includes your food and drink and the service charge.”
Only air-conditioned restaurants are required to charge service tax. If you are taxed on the full bill and not on the 40 percent of the bill as directed, you can question it.
“To make things simple, service tax should be 40% * 12.36% = 4.94% on the total bill. Hence, whenever you see service tax on the total bill exceeding about 5%, you can question it.”
Another charge many may not be aware of is that restaurants charge a state tax or valued-added tax. Depending on the state, this tax could be 5-20 percent. VAT for food and drinks is different. Restaurants may combine food and drinks on a bill and charge a flat rate on the total bill. A separate bill for drinks and food is a good idea. “This should clearly show the different VAT for both the items.”
The Economic Times presented a list below that itemizes a bill so you can see the difference in the VAT for service charges, service taxes, and VAT charges on a bill.
“Bill of food item – 900
Service charge (assuming 6 %) – 54
Sun total – 954
Service tax to be levied on (40% of subtotal) – 381.6
Service tax (at the rate of 12.36% – 47.16576
VAT @ 12.5% of the sub-total – 119.25
Total amount to be paid – 1120.41″
Some restaurants charge a sharing fee. Many people share entrées. So, some restaurants will charge a sharing fee.
“One way to get around this is one person order an entrée and another person order a side. Since each customer has an order, no sharing fee will be charge.” Or simply go for the appetizer instead of a entrée. Appetizers are closer to the size of a regular meal.”
Another way restaurants inflate your bill is by charging excessive mark-ups for adult beverages. Some restaurants have BYOB (bring your own bottle) policies. It’s also an option that you can use to reduce your bill. Beware though, some restaurants charge corking fees.
Hospitality tax is a local two percent tax levied on prepared meals and drinks including all alcoholic beverages. All restaurants are required to pay this tax. And it must be used for tourism-related activities and improvements.
Reducing your bill may be difficult due to your unwillingness or the manager’s ignorance. These tips are ways you can lower your restaurant bill. It has worked for some and may work for you as well.