Restaurants charging for service? Centre flags ‘forced’ cost; calls for meeting with owners

This comes at the wake of complaints registered by consumers on the National Consumer Helpline (NCH) saying that the restaurants and eateries are collecting service charges from consumers by default.

The department said, ‘‘consumers are being “forced to pay the service charge, often fixed at arbitrarily high rates”

The Consumer Affairs ministry on June 2 reiterated that paying service charge at restaurants is at the discretion of consumers and restaurant owners cannot be forced to do so at any cost. This comes at the wake of complaints registered by consumers on the National Consumer Helpline (NCH) saying that the restaurants and eateries are collecting service charges from consumers by default.

The Department of Consumer Affairs (DoCA) – under the Ministry of Consumer Affairs, Food and Public Distribution, moreover, has scheduled a meeting on 2nd June 2022 with the National Restaurant Association of India to discuss why some restaurants are forcing consumers to pay for service charge which is voluntary by law. The department said, ‘‘consumers are being “forced to pay the service charge, often fixed at arbitrarily high rates”

“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,” said a statement issued by the Department of Consumer Affairs on Monday.

The department said that it has found it necessary to examine the issue closely as it impacts consumers at large on a daily basis and has significant ramifications on the rights of consumers. The statement further said that four key issues will be discussed at the meeting in connection to the service charge being levied. They are restaurants making service charges compulsory; adding them to the bill in the guise of some other fee or charge; suppressing information from consumers that service charge is optional and voluntary, and embarrassing consumers if they refuse to pay a service charge.

Referring to the guidelines issued by the department in April 2017, the statement said that “the entry of a customer in a restaurant cannot by itself be construed as a consent to pay a service charge. Any restriction on entry of the consumer by way of forcing her/ him to pay the service charge as a condition… to placing an order amounts to ‘restrictive trade practice’ under the Consumer Protection Act”.

The guidelines further state that the consumer is only liable to pay the prices displayed on the menu along with the applicable taxes. Charging for anything other than the aforementioned, without the customer’s consent amount to unfair trade practices. In such a case consumers can approach the Consumers Dispute Redressal Commission / Forum of appropriate jurisdiction and are entitled to be heard and redressed.

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