Service Tax :
Service tax is a tax imposed by the government. This is 15 percent and is payable on 40 percent of your total billing amount. This bill is inclusive of food, drinks, service charge and other services.
Service Charge :
Service Charge is imposed by a restaurant/hotel for offering their services to you. It is not considered as a tax and is not imposed by the government. This is purely charged by the restaurants and they are free to charge any amount as there are no set guidelines by any of the authorities. But this usually varies from 5% to 20% .
So next time you visit your favourite restaurant or hotel, then know the difference on the bill. And as per the new rules by the Indian Government Service Charge is now optional i.e. restaurants or hotels may not force you to pay the service charges if you are not willing to.
So don't get confused between the service tax and service charges. Share the knowledge to let others know.