Should You Be Paying Service Charge In Restaurants? Govt Calls Meeting

OB Bureau

New Delhi: Whenever you have a hearty meal at a restaurant, you have to pay a service charge to the eateries.

But is it fair for restaurants to levy a service charge on the bill?

The Central government has called a meeting of restaurant owners over the issue of service charge levied by eateries on their customers.

The meeting, to be organized by Department of Consumer Affairs (DoCA), under the Ministry of Consumer Affairs, Food and Public Distribution, will be held on June 2 with representatives of National Restaurant Association of India.

Consumer Affairs Secretary Rohit Kumar Singh had written to the restaurant body a few days ago, highlighting collection of service charges by eateries. He mentioned in the letter that restaurants and eateries are collecting service charges from consumers by default, even though collection of any such charge is voluntary and at the discretion of consumers, and not mandatory as per law.

“It has been pointed out in the letter that the consumers are forced to pay service charge, often fixed at arbitrarily high rates by restaurants. Consumers are also being falsely misled on the legality of such charges and harassed by restaurants on making a request to remove such charges from the bill amount,” the DoCA statement said.

“Since this issue impacts consumers at large on a daily basis and has significant ramification on the rights of consumers, the department construed it necessary to examine it with closer scrutiny and detail,” the statement said, quoting the letter written by the Secretary to restaurant association.

Four issues will be discussed at the meeting on June 2 — restaurants making service charge compulsory, adding service charge in the bill in the guise of some other fee or charge, suppressing from consumers that paying service charge is optional and voluntary and embarrassing consumers in case they resist from paying service charge.

A 2017 guideline issued by DoCA to hotels/restaurants on service charge stated that entry of a customer in a restaurant cannot be itself be construed as a consent to pay service charge.

“Any restriction on entry on the consumer by way of forcing her/him to pay service charge as a condition per cent to placing an order amount to ‘restrictive trade practice’ under the Consumer Protection Act,” the statement said.

“The guidelines clearly mention that placing of an order by a customer amount to his/her agreement to pay the prices displayed on the menu card along with the applicable taxes. Charging for anything other than the afore-mentioned. without express consent of the customer. would amount to unfair trade practice as defined under the Act,” it said.

“As per the guidelines, a customer is entitled to exercise his/her rights as a consumer to be heard and redressed under provisions of the Act in case of unfair/restrictive trade practices. Consumers can approach a Consumer Disputes Redressal Commission/Forum of appropriate jurisdiction,” it added.

OB Bureau

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