Restaurants cannot mandatorily levy service charge on food bills: Delhi HC

Justice Prathiba M Singh dismissed petitions of restaurant bodies challenging Central Consumer Protection Authority guidelines prohibiting hotels and restaurants from levying mandatory service charge on food bills

New Delhi: The Delhi High Court on Friday held the payment of service charge by customers on food bills was voluntary and couldn’t be made mandatory by restaurants or hotels.

Justice Prathiba M Singh pronounced the judgement and dismissed petitions of restaurant bodies challenging Central Consumer Protection Authority guidelines prohibiting hotels and restaurants from levying mandatory service charge on food bills.

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The plea by the National Restaurants Association of India (NRAI) and the Federation of Hotel and Restaurant Association of India (FHRAI) argued that there is no law which stops restaurants from levying service charge, according to Bar and Bench.

“In the absence of due authentication and promulgation of the guidelines, the contents thereof cannot be treated as an order of the Government,” the plea had stated.