What does the China coffee industry say about separate VAT billing?
A café in Chengdu added a 10% service charge and 6% VAT to an 82 yuan beverage bill, bringing the total to 95.61 yuan. The customer said the notice sat in tiny, vague text below the price list and was never mentioned during ordering. Tax authorities called the charge compliant as long as the business pays taxes normally, while market supervision said it could suggest rectification but not impose penalties.
The case highlights a gray area in China and coffee retail: listing commodity prices and taxes separately. Under the Provisions on Clearly Marked Prices and Price Fraud, effective July 1, 2022, operators may not weaken or hide price conditions unfavorable to consumers. The dispute has renewed discussion of clear pricing and the consumer's right to know.
Recently, a consumer in Chengdu discovered an additional 10% service charge and 6% value-added tax (VAT) on the bill when paying at a café, sparking questions about how businesses display their prices. The consumer felt that although there was a notice, it was extremely inconspicuous, and that they were forced to accept the charge only after consuming. Tax authorities responded that as long as the business pays taxes normally, it is compliant, while the market supervision department stated it could suggest rectification but could not impose penalties. This incident reflects the current gray area where commodity prices and taxes are listed separately, and has also triggered discussions about clear pricing and consumers' right to know. This article will reconstruct the course of events, sort out the responses from all parties, and explore consumers' genuine feelings under the trend of listing taxes separately.
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According to media reports, Ms. Yin from Chengdu was consuming at a café when, in addition to the 82 yuan beverage fee, the receipt also included a 10% service charge and 6% VAT, bringing the total payment to 95.61 yuan. Ms. Yin pointed out that although the business had made a note below the price list in extremely small text and vague wording, the notice was very inconspicuous. The staff explained at the time that the shop was hotel-operated, so customers needed to bear the VAT, and mentioned that there was also a note about the additional VAT on the tray. However, Ms. Yin said the server did not proactively inform her of this charge during the ordering process, and she only learned of it passively at checkout.
The Provisions on Clearly Marked Prices and Price Fraud, which took effect on July 1, 2022, clearly state that business operators shall not, when selling goods or providing services, use deceptive or misleading language, text, numbers, images, or videos to mark prices and other price information, nor shall they fail to mark or weaken the marking of price conditions unfavorable to consumers, thereby inducing consumers to conduct transactions.
Ms. Yin said of this: "If you say it's violating regulations, there really is a notice; if you say prices are clearly marked, it still feels like clear pricing was not achieved at all. I think I should have been made clearly aware of the cost breakdown before the consumption began. Now it feels like I was forced to pay this money and only told after consuming. The process itself is wrong, and the business's price labeling is suspected of price fraud."
Afterward, Ms. Yin complained to the local relevant authorities, hoping they would intervene, investigate, and impose penalties, and also requested that the business modify its menu to show the actual payment price.
On October 10, staff from the Chengdu Jinjiang District Taxation Bureau responded that some businesses in Chengdu indeed adopt this charging method, and that as long as the business pays taxes normally in accordance with the law, it is compliant, and consumers can request invoices from the business. Some businesses mark the product price on the menu and then separately list the VAT amount below.
After investigation, the Jinjiang District Market Supervision Administration also fed back to Ms. Yin that the café menu did indeed have a notice about the charges, but the font size was very small. The market supervision department could suggest rectification but could not impose penalties or force rectification.
In response to the consumer's questions, café staff said that a dedicated person was responsible for the matter and would relay it to management, but as of the time of publication, no formal response from the business had been received.
At present, China's price bureau and industry and commerce bureau have not yet made clear provisions on whether commodity prices and tax amounts should be listed separately on product labels, so as long as businesses pay taxes in accordance with the law, it is legal, and the specific arrangement depends on the business itself. In fact, sometimes the amount we pay already includes VAT, and the product prices displayed by some businesses are themselves tax-inclusive prices.
This approach may be easier for people to accept, just like the psychology of being willing to buy clothes costing hundreds or thousands of yuan but feeling reluctant to pay a few extra yuan for shipping. However, with the continuous improvement of the taxation system, separately listing taxes may become increasingly common.
Consumers see one price before placing an order, but it becomes another price at payment. This somewhat "hidden" way of labeling may not be appropriate. Businesses should achieve clear and honest pricing, or proactively remind customers before they place an order, which would be better.
Image source: Internet
The above content is compiled by CoffeeHunters, a coffee news website.
