Cautioning restaurants against levying service charges, the consumer affairs ministry has said such practice impacts consumers at large on a daily basis and has significant ramifications on the rights of consumers. The ministry has scheduled a meeting on June 2 with the National Restaurant Association of India (NRAI) to discuss the issues pertaining to service charges levied by restaurants.
Department of Consumer Affairs Secretary Rohit Kumar Singh in a letter to the 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.
Restaurants usually charge a 10 per cent service charge over the total bill.
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. “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 letter said.
The issues to be discussed during the meeting includes those related to complaints by consumers such as 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 the service charge.
“The meeting follows as a result of DoCA taking notice of a number of media reports as well as grievances registered by consumers on the National Consumer Helpline (NCH),” the Ministry of Consumer Affairs said in a statement on Monday.
The Department of Consumer Affairs published guidelines in April 2017 on charging of service charge by hotels and restaurants. The guidelines note 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 percent to placing an order amount to ‘restrictive trade practice’ under the Consumer Protection Act,” the statement said.
It added that the guidelines 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 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 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, the statement said.
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