Service Tax Row: Trade Unions warn of further protest

14th Feb, 2017 | Tourism Mail Crew

KATHMANDU, 14 Feb: The row over the granting of service charge has feuded over and over. Now the agitating staffers of the restaurants and hotels has warned of hitting the street from 16th of this month if their demands are not met.

Trade unions related to hotels and restaurants have been demanding for the entire amount of service charge being collected from customers. Currently, the service charge amount is being shared among the workers and the management in the ratio of 68:32.

The 10 per cent service charge on top of the advertised bill had been introduced in January 2007 following a bilateral agreement between Hotel Association Nepal (HAN) — the umbrella body of tourist standard hotels in the country — and the trade unions of hotel and restaurant workers, with the provision that the agreement would be reviewed every three years.

Trade unions affiliated with three major political parties, namely, Nepal Tourism and Hotel Labourers Association; Nepal Independent Hotel, Casino & Restaurant Workers’ Union; and All Nepal Hotel, Casino and Restaurant Workers’ Union have been taking the lead in the protests.

The agitating forces had submitted a joint memorandum to the HAN, Restaurant and Bar Association of Nepal (REBAN) and Fastfood Association Nepal a month back demanding the entire service charge amount.

Subsequently, HAN had invited the trade union leaders around three weeks ago to sit for talks to resolve the issue. However, the talks ended inconclusive as the trade union leaders refused to budge from their stance on claiming cent per cent stake on the service charge.

A joint team of HAN and REBAN are going to sit for talks again with the trade unions on February 14 to try to find an amicable solution to the issue.

Consumer rights activists, on the other hand, say that the matter on which the trade unions have locked horns with hoteliers and restaurant owners has no legal base.

A consumer has to pay extra 24.3 per cent — 10 per cent service charge, 13 per cent value added tax and 1.3 per cent VAT amount of the
service charge — on top of the advertised bill for obtaining service from hotels and restaurants.