Tipping and Taxes in India


In India, prices displayed for items is the M.S.R.P (Manufacturer’s Suggested Retail Price) which includes taxes. So, if someone asks for a price other than what’s on the package, know that they are trying to deceive you.

This, however may not always be the case for restaurants and hotels. Many restaurants itemize additional charges for VAT (government tax), service, bottled water, and alcoholic drinks — all at different rates! The bills can be slightly confusing.  If the total falls in the ballpark you were expecting to pay, don’t bother trying to figure out the math.

Hotel rooms above a cutoff price have additional government tax levied on them. Your bill may reflect a 10 percent service charge added.


Although tipping isn’t the norm in Asia, a little gratuity is expected in India, especially from foreigners.  Most waiters will go out of the way to please their foreign guests in expectation of a good tip.  A tip of 10 percent is generous, while other services have loosely fixed amounts. For instance, you can tip hotel porters 20-50 rupees for luggage carried to your room.

The service charge added in restaurants will most likely go into the owner’s pocket, especially if you paid by credit card.  If you want to ensure that your hard-working waiter is rewarded, pay tips in cash.

For tipping to hotel staff, it is advisable to tip at the very end on your way out.  I usually let the staff know that I will give one big tip at the end of the stay at the reception. This way, I get consistent service, and the staff all lookout for my needs. And you also need not worry about keeping small bills handy for tipping.

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