Centre warns restaurants over service charges, convenes meet over it

NEW DELHI: The Centre has warned restaurants against levying service charges and convened a meeting on June 2 with the National Restaurants Association of India (NRAI) to discuss the matter.

In a letter to NRAI, Rohit Kumar Singh, the consumer affairs department secretary, said restaurants were collecting service charges by default even though this is voluntary and at the discretion of consumers and not mandatory. “Since this issue impacts consumers at large on a daily basis and has significant ramifications on the rights of consumers, the department construed it necessary to examine it with closer scrutiny and detail.”

In a statement, the consumer affairs, food, and public distribution ministry said consumers were being falsely misled on the legality of such charges and harassed for requesting their removal from the bills.

“In relation to this, the meeting will discuss restaurants making service charges compulsory; adding service charges to the bill in the guise of some other fee or charge; suppressing from consumers that paying service charges is optional and voluntary; and embarrassing consumers in case they resist from paying the service charge.”

As per the guidelines issued in April 2017 , a customer’s entry into a restaurant cannot itself be “construed as a consent to pay service charge”. Any restriction on entry based on payment of service charges is a violation of the Consumer Protection Act. Restaurants normally charge somewhere between five to 10% as service charges.