Rs 1 Lakh Fine If Restaurants Charge You Service Tax On Food Bills From Today

The Delhi High Court ruled on Friday that service charges on food bills are voluntary and cannot be imposed by restaurants or hotels. 

Justice Prathiba M Singh pronounced the judgment, rejecting petitions from restaurant associations that challenged the Central Consumer Protection Authority's guidelines, which prohibit hotels and restaurants from enforcing mandatory service charges. 

The High Court ruled that making service charges mandatory violates consumer rights and constitutes an unfair trade practice, regardless of the name used for collection. 

The court further stated that businesses should not impose service charges but should allow customers to decide whether to pay them. 

The July 2022 CCPA guidelines were designed to prevent unfair trade practices and ensure consumer rights are upheld in relation to service charge imposition. 

CCPA 2022 Guidelines:  Service Charges on Food Bills

As per a media report, the Federation of Hotels and Restaurant Associations of India (FHRAI) and the National Restaurant Association of India filed two separate petitions in 2022. 

On March 9, FHRAI urged authorities to separate the GST on food and beverage services from accommodation charges in hotels. 

ALSO READ: India Exports 254 Million Kg Tea, Surpasses Sri Lanka