Hyderabad restaurant fined for forcing customer to pay service charges

The restaurant had charged a 5 per cent service charge to a customer even after being requested to waive it. (Representative image)

A upscale restaurant in Hyderabad has been fined for imposing service charge on customers and has been directed by a consumer forum to keep the charge optional.

A customer of AnTeRa Kitchen and Bar in Jubilee Hills had filed a complaint against it after he was forced to pay service charges in August 2021, reported Newsminute. The District Consumer Disputes Redressal Commission – I in Hyderabad asked the restaurant to refund the service charges and pay a fine of Rs 3,000.

The court cited the guidelines on levying of service charges by restaurants and hotels issued by the Centre in April 2017 according to which, "charging additional service charges to a customer beyond the price of the products without express consent from the customer amounts to unfair trade practice".

The complainant, advocate Rajashekar Kanaganti, said that he had visited the restaurant on August 27, 2021, for dinner with his friends. The bill amounted to Rs 3,543 including a 5 per cent service charge of Rs 164.95.

Kanaganti asked the waiter to remove the service charge and allow him to tip him separately. The waiter, however, said that his employers had not given him any such instruction about such an option, and that any complaint about this may cost him his job.

Kanaganti and his friends then approached the manager and showed information about service charge guidelines from a Union government website, but they were still made to pay the extra amount.

The advocate then served a legal notice in September to which the AnTeRa Kitchen and Bar didn’t respond, after which he moved the District Consumer Disputes Redressal Commission and accused the eatery of illegally pocketing service charges, the report in Newsminute stated.

The Commission stated that from the bill provided by Kanaganti, it was clear that the restaurant had indeed committed unfair trade practice. It directed AnTeRa to make paying service charge optional, and to refund Rs 164.95 collected as service charge to Kanaganti. It also ordered the eatery to pay him Rs 2,000 towards mental agony suffered and Rs 1,000 for the expenses incurred while sending them a legal notice.