Service charge in restaurants not mandatory but voluntary on customer's consent: Centre

In view of several restaurants levying service charges on customers by default, the central government on Monday called a meeting with the restaurant owners to discuss the issue of service charges levied by eateries on their customers and further also warned against forcing customers to pay the charges. During this while, the government also reminded the owners that the collection of service charges from customers is completely voluntary and can't be mandated by law upon them. 

In the same concern, the Department of Consumer Affairs (DoCA) has also called for a meeting with the National Restaurant Association of India on June 2, 2022, where it would be discussing the issues concerning service charges levelled on customers. This came after the DoCA took cognizance of multiple media reports and the complaints registered by the people on the National Consumer Helpline where they claimed that several restaurants are collecting service charges by default. 

Following this, Rohit Kumar Singh, Secretary, Department of Consumer Affairs wrote a letter to the National Restaurant Association of India informing them that customers are being forced to pay service charges fixed by the restaurants. 

"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”, the letter stated. 

The letter also noted the concerning issues that are to be discussed during the meetings. Those include:

1. Restaurants making service charges compulsory
2. Adding service charge in the bill in the guise of some other fee or charge.
3. Suppressing from consumers that paying service charges is optional and voluntary.
4. Embarrassing consumers in case they resist paying service charge

Government guidelines on service charges

The Department of Consumer Affairs had already published a series of guidelines in April 2017 in reference to the charging of service charges by hotels or restaurants. The guidelines clearly note that the entry of a customer in a restaurant cannot by itself be construed as a consent to pay service charges further adding that any such restriction on entry on the consumer by way of forcing her/him to pay service charges as a condition will come under the Consumer Protection Act.

In addition to that, it also mentions that while placing an order by a customer reflects his/her agreement to pay the prices on the menu card, charging for anything else without their consent will amount to unfair trade practices. 

Regarding this, the consumers have the right to approach a Consumer Disputes Redressal Commission seeking redressal. 

Image: PTI