Restaurant service

Restaurant service charge: Government puts service charge on menu for discussions with restaurant body

The Department of Consumer Affairs (DoCA) has criticized restaurants for collecting service charges, following consumer complaints, and has set up a meeting with restaurant owners on June 2 to discuss the issue.

Consumers are being falsely misled about the legality of such charges and harassed by restaurants seeking to remove such charges from the bill amount, said a senior consumer, food and public distribution official. The collection of these fees is at the discretion of consumers and not mandatory by law, the official said.

“Since this issue affects consumers as a whole on a daily basis and has significant ramifications on consumer rights, the Ministry has found it necessary to examine it more closely and in detail,” said Rohit Kumar Singh, Secretary of the Ministry. of Consumption, in a letter to the President of the National Restaurant Association of India (NRAI).

NRAI chairman Kabir Suri, however, said most customers were happy to pay for the services provided. “Most menus also mention that the service charge is discretionary,” he said.

The DoCA called the meeting after numerous grievances were registered by consumers on the National Consumer Helpline.

The ministry said in its guidelines, published in 2017, that a customer’s entrance into a restaurant cannot by itself be construed as consent to pay a service charge. Any restriction on consumer entry by requiring them to pay a service fee as a condition of placing an order amounts to a “restrictive business practice” under the Consumer Protection Act.

The guidelines mention that placing an order by a customer constitutes his agreement to pay the prices displayed on the menu card as well as applicable taxes.