Are we taxed incorrectly ?

Nobody wants to pay taxes, but taxes are essential for the development of the community. With the changing of the time we often see tax reforms and like everything that happens in the world, you will find people in support or against the tax reforms.

In 2017 India introduced the biggest tax reform(as claimed by experts) by the introduction of Goods and Services Taxes or GST. Now, there are many points for and against it. But in my opinion it was a good move, however I feel the way it was implemented was not good. But at the same time, in a country as huge and diverse as India, implementation was always going to be a challenge.

The best thing I liked about it was the removal of cascading of taxes. This article by Satish on GST describes how it happens. Satish explains it using the example of sale of a car by a dealer to an end consumer.

One thing that was there in VAT is that the tax that is applied only to the service provided. As you can see in the screenshot below, Make My Trip is charging a service fee and the tax is being applied on the service charge.

Make my trip invoice

But in restaurants, the way we are taxed is different. As you can see in this invoice, the GSTs are applied on the whole bill(total price of food, i.e., 790 + Service Charge). In my opinion, it should be applied on the service charge.

Invoice from a Pub

This is the case in most eateries or juice shops. So am I wrong to say that we are being taxed incorrectly?

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