Café Tax Controversy: Additional Charges Questioned by Customers

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Coffee Shop Dispute Over Hidden Service Charges and VAT

Recently, according to media reports, a 10% service charge and 6% value-added tax (VAT) were added to a coffee bill. The incident involved Ms. Yin, who was charged a 6% VAT while consuming at a coffee shop in Chengdu. Ms. Yin stated that although there was signage, it was not conspicuous. The merchant only used very small text and ambiguous language to make notes at the bottom of the price list.

The specific situation occurred on October 2nd when Ms. Yin consumed at the restaurant. When settling the bill, the drinks amounted to 82 yuan, but the bill included a 10% service charge and 6% VAT, totaling 95.61 yuan. The staff member told her at the time that they operate as a hotel, so customers need to pay VAT, and claimed that the plates in the store also had notices about the additional VAT charge. However, the location was not conspicuous, and the staff did not provide any reminder when the customer was consuming.

Regulations on Price Display and Consumer Protection

The "Regulations on Clearly Marked Prices and Price Fraud," implemented on July 1, 2022, explicitly stipulate the price fraud behaviors that operators must not engage in: when selling goods or providing services, using deceptive or misleading language, text, numbers, pictures, or videos to indicate prices and other price information; not indicating or displaying in a weakened manner price conditions unfavorable to consumers or other operators; and inducing consumers or other operators to trade with them.

"This violates the regulations, but then again, it doesn't—there really was signage. Saying it's clearly marked, yet I feel this isn't clearly marked pricing. This matter should have made me understand where my consumption costs were from the beginning. Now it's equivalent to being forced to pay, only being informed about this after consumption, which feels wrong. The process is flawed. I believe the merchant's price indication constitutes price fraud behavior," Ms. Yin expressed.

Official Response and Legal Perspective

Afterward, Ms. Yin complained to local authorities about the merchant's behavior, hoping that relevant departments would investigate and penalize them, and require them to modify their menu to indicate actual prices.

On October 10th, staff from the Chengdu Jinjiang District Taxation Bureau stated that there are indeed merchants in Chengdu who set up fees this way, and as long as they pay taxes normally, it is compliant. Consumers can request invoices from merchants. Some merchants will write the product price on the menu, and then separately indicate the VAT amount for the product below.

After investigation and verification, the Jinjiang District Market Supervision Administration also replied to Ms. Yin, stating that while the coffee shop menu did have a notice about this fee collection, the text was indeed very small. The market supervision department can suggest rectification but cannot penalize or enforce mandatory changes.

Facing consumer questioning, a staff member from the coffee shop stated that this matter is handled by dedicated personnel and will be reported to leadership, but as of now, no response has been received from the merchant.

Consumer Psychology and Future Pricing Trends

Currently, China's Price Bureau and Administration for Industry and Commerce have not yet made clear regulations on whether commodity prices and tax amounts should be separately marked on product labels. Therefore, as long as merchants pay taxes according to law, it is legal—it just depends on how merchants set it up. In fact, sometimes our consumption may already include VAT, and the prices displayed by some merchants already include the required tax amounts.

This approach might be more acceptable to people—it's like the psychology where I can buy clothes worth hundreds or thousands of yuan, but I'm unwilling to pay a few extra yuan for shipping. However, with the advancement of tax collection systems, separately itemized taxes may become more common.

When consumers see one price before ordering but then face a different price at payment, this "hidden" way of displaying product prices may be inappropriate. Clear, marked pricing must be enforced, or it would be better to provide reminders before customers place their orders.

Image source: Internet

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