To pay or not to pay service charge in restaurants: Here’s what government says

Hyderabad: Several high-end restaurants and hotels levy the service charge from customers for their services. At times, we are forced to pay though we are not happy with the service. But, the government’s guidelines say it is voluntary to pay the service charge and not mandatory. Department of Consumer Affairs Secretary Rohit Kumar Singh in […]

Hyderabad: Several high-end restaurants and hotels levy the service charge from customers for their services. At times, we are forced to pay though we are not happy with the service. But, the government’s guidelines say it is voluntary to pay the service charge and not mandatory.

Department of Consumer Affairs Secretary Rohit Kumar Singh in a letter to the National Restaurant Association of India (NRAI) has pointed out that the restaurants and eateries are collecting the service charge from consumers by default, even though the collection of any such charge is voluntary and at the discretion of consumers and not mandatory as per law.

---

Usually, restaurants charge a 10 per cent service charge over the total bill.

The Department of Consumer Affairs under the Ministry of Consumer Affairs, Food and Public Distribution has called a meeting with NRAI, which will be held on June 2, 2022.

As per a statement issued by the department, “issues pertaining to service charges levied by restaurants” will be discussed during the meeting.

In April 2017, the Department of Consumer Affairs published guidelines on charging the service charge by hotels and restaurants according to which, the entry of a customer in a restaurant cannot by itself be construed as consent to pay a service charge.

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

It added that the guidelines mention that placing an order by a customer amounts to their agreement to pay the prices displayed on the menu card along with the applicable taxes. Charging for anything other than the aforementioned without the express consent of the customer would amount to an unfair trade practice as defined under the Act.

As per the guidelines, a customer is entitled to exercise their 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, the statement said.