Legal Aspects Handouts (Prelim)
Legal Aspects Handouts (Prelim)
Legal Aspects Handouts (Prelim)
A Night Out
You decide to go to one of your favorite take-out restaurants. You order the chow mein
noodles with a side of Kung Pao and orange chicken. Hours later you feel terribly ill and
are having sharp pains in your belly, followed by vomiting throughout the night. You
decide to go to the emergency room where blood and stool samples are taken for
diagnosis.
After a short wait, the doctor diagnoses you with food poisoning. Once at home, you turn
on the television and on the news you see that 10 other people have complained of
symptoms of food poisoning after eating at the same restaurant. Though for most, food
poisoning is not a serious illness, it is not one that anyone should ever get after eating at
a restaurant.
There are laws and standards that every restaurant must abide by when serving
customers. Restaurants should always serve food that is edible and safe for
consumption. Outside of their moral obligation to prepare quality foods, it's their legal
obligation to ensure that patrons are not getting sick from eating in their establishments.
Hospitality law is a legal and social practice related to the treatment of a
person's guests or those who patronize a place of business. Related to the
concept of legal liability, hospitality laws are intended to protect both hosts and
guests against injury, whether accidental or intentional.
Hospitality laws relate to food service, travel, and lodging industries. It governs the
various nuances of the hotel, restaurant, bar, spa, country club, meeting, and convention
industries, among others. Much like entertainment law, homeowners association law, and
other specialty fields, hospitality law is much more a description of the types of clients
who seek out the attorneys who focus their practices in these areas rather than an actual
set of laws. Hospitality law commonly encompasses a wide array of laws including
contracts, anti-trust, torts, real estate, and many others.
Hospitality laws were created to ensure that restaurants, hotels, motels, and other
public accommodations are providing safety measures within their establishments to
ensure the well-being of their patrons. People are expecting to eat good foods when they
visit a restaurant. When lodging at a hotel or motel, people are expecting a good night's
stay free from any type of harm. They should be protected from any type of criminal
activity, such as robbery or assault. What protects us from harm are the laws in place to
reduce the chances of these things occurring.
WEEK 2.1Important Licenses Required by Hotels under Various Acts (page 9 & 43)
Police License / Registration.
License under Shops & Establishments Act.
License under Prevention of Food Adulteration Act.
Registration under the Luxury Tax Act.
Registration under the Sales Tax Act.
Registration under the Contract Labour Act.
Registration under the Pollution Control Act.
Registration under the Apprentices Act.
Registration under the Provident Fund Act.
Registration under the ESI Act.
Entertainment License on Festival Occasions.
License for Chimney under the Smoke Nuisance Act.
Registration under the Weights & Measures Act.
Factory License for Laundry.
Central Excise License for Bakery Products.
Registration & Permits under the Motor Vehicle Act for Tourist Coaches / Taxies.
Eating House License.
Municipal Beer Bar License.
License for storage of Diesel Oil.
License for storage of Kerosene & Compressed Gas (LPG).
Sign Board Directions, Neon Signs.
License to deal in Foreign Exchange under FEMA.
Cold Storage License, (if over 25 cubic ft.).
License for Boiler & Generators and Mixers and Grinders.
Bar License (Foreign Liquor).
Mild Liquor License.
Temporary License for Awnings & covering of Terrace during monsoon.
Building Completion Certificate.
Copy Right License for Playing of Music.
Lodging House License
Approval from the Department of Tourism, Government of India.
Registration from GTDC for new projects under the Package Scheme of Incentives.
When you eat out at restaurants in town, both fine dining and mid-range, do
you ever pay much attention to the constitution of the bill? For a meal where
you may have ordered dishes worth Rs.1000, you may often end up paying
around Rs.1400-1500. The extras include taxes and service charge.
Hotels, inns, commercial guest houses, serviced apartments and other
businesses providing temporary stay facilities, play a major role in the travel and
tourism industry.
Service Charge:
In recent years, customers have had to pay 7-20 percent of their bill value as
service charge, irrespective of the services they received. This amount is a
sort of ‘forced tip’ that the diner must pay, which is supposed to be divided
amongst the staff of the restaurant. It keeps them motivated and pushes them
towards greater service standards. However, The Department of Consumer
Affairs has rung in the New Year with a statement that empowers customers
to ask for the service charge to be waived off if the services offered are not up
to the standard expected.
Service Tax:
The government levies several taxes, one of which is the service tax. It is the
tax levied on the service provider but eventually is borne by the customers
utilizing that particular service. This is a mandatory inclusion in your bill.
However, takeaway outlets have the flexibility to include this tax into their
menu pricing so what you see is what you pay. You may have mistakenly
believed that service charge is also a government levied mandatory charge.
However, it is essential to note that the government does not impose a
service charge in restaurants and it is charged by the restaurants themselves,
for services rendered. The amount they charge varies, depending upon the
establishment.
Service Tax is payable to services provided by the provider. It is similar to
excise duty where an amount is payable on goods that are manufactured. It is a
type of indirect tax that is collected by the government after consuming the taxable
services provided by travel agents, restaurants, cable providers, cab services, etc.
Local Tax - 2.5% ( Local government units (LGUs) derive their revenues
from local and external sources. Local sources include tax revenues
from the real property tax and the business tax, and non-tax revenues
from fees and charges, receipts from government business operations
and proceeds from sale of assets.)
Beverage:
VAT - 12%
Local Tax - 0.6%
1) The service tax is a government levied tax and is fixed in every state
of India, at 14 percent. On the other hand, service charge is an extra cost
charged by the restaurant, which varies. It is a means to cover ‘tip’ cost, as a
lot of customers in India may not tip.
2) The service tax conforms to certain guidelines laid down by the
government. Unlike this, the service charge is not bound by any guidelines
from the government.
4) The service tax is recovered by the government. On the other hand, the
service charge goes directly to the restaurant.
5) While the service tax is the same throughout the country, service
charge varies from restaurant to restaurant.