The Department of Consumer Affairs released an advisory on January 2 which said that the ‘service charges‘, which restaurants include in addition to taxes, are actually optional and not mandatory.
The Department of Consumer Affairs released an advisory on January 2 which said the ‘service charges’, which restaurants include in addition to taxes, are not mandatory.
Generally, restaurants charge 5-20 percent of the total bill amount to customers for their service.Various industry bodies of hotels and restaurants including consumer activists are voicing divided opinions over this notification.
In a panel discussion on CNBC-TV18, Vaibhav Gaggar, Managing Partner at Gaggar & Associates said a lot of services cost is already inbuilt in the menu price and there needs to be a caveat that customer need not pay if the service was bad.
On the other hand, Dilip Datwani, President, Hotel and Restaurant Association of Western India feels hotels have been notified to clearly mention if they are levying service charge and it is not up to the government to say if the restaurant can levy service charges.
Datwani further says the association has reached out to the ministry stating that the issued advisory is wrong and will also take legal recourse if the notification is not taken back.
In the discussion, consumer rights columnist Pushpa Girimaji along with consumer activists Anand Patwardhan and Anil Sood voiced their opinions on the topic.
