Service charge

Customer cannot refuse to pay service charge after consuming food: Restaurant Association

NEW DELHI: After consuming the meal served in a restaurant, a customer cannot request the removal of the service charge, the National Restaurant Association of India has said.

He also stated that service charge information is mentioned and/or displayed by restaurants on their menu cards and also displayed on a restaurant’s premises and that there is nothing illegal in that.

In a meeting with the Department of Consumer Affairs, the Association said the collection of service charges by restaurants is a matter of individual policy and that customers are aware of such charges before enjoying services in restaurants. . This matter, he said, had also been raised in 2016-2017, and she had already provided her response to the government on the matter.

Last month, the Department of Consumer Affairs, Food and Public Distribution said in a statement that consumers were being misled about the legality of the service charge and were also being harassed when asking for it to be removed. bills. The DoCA had said that several grievances were registered by consumers on the National Consumer Helpline on this issue.

The National Restaurant Association said that once a customer places an order, a contract comes into effect and the restaurant offers to provide the food on the menu and it is up to the customer whether or not to accept the restaurant’s offer while places his order at the restaurant. This is when the customer must exercise the option of whether or not to accept the offer of the price of the product plus the service charge.

“The levying of service charges is beneficial to laborers as a class who are employed in establishments. Anything to the contrary would be detrimental to workers’ interests – and against the government’s pro-worker stance. It also brings revenue to the government, since the tax is paid on the same,” he said.

The association’s spokesperson said: “We have strongly reiterated all facts with evidence that the collection of service fees is neither illegal nor an unfair business practice as alleged, and this debate in the public domain creates unnecessary confusion and disruption to the smooth operation of restaurants. The service fee is transparent, worker-friendly, and is also recognized by numerous court orders that have been shared with the department. In addition, the government also derives revenue from service charges, as the tax is paid by restaurants on these charges. »

Ajit Shah, co-founder of White Panda Hospitality, which owns three restaurants in Delhi including Kiko Ba and Tera Vita, said such kind of money always goes to staff welfare and is distributed as a percentage to staff working at the restaurant, in front and behind the house. “A service charge has been introduced into the system to replace the unstable tipping system,” he said.

He said that as far as the law is concerned, the charge is discretionary and the contract comes into effect even after the food has been consumed. “Consumers may not know they would be dissatisfied with the experience until they eat the food and should be able to decide even after the meal is finished, but in our restaurants, servers and floor managers are trained to ask customers a few times if the food being served is good and if they are comfortable with the experience just to make sure they come back happy. So in a scenario like this, when the customer is happy and yet asks to take the service charge off the bill, it only implies that the customer is cutting costs a bit,” he said.

A customer who did not want to be named said that as a customer he did not always feel comfortable paying the “discretionary” fee even when the service was good. “It’s my money and the fact that it’s discretionary means I should be able to decide when I want to pay it,” they said.

The association said it represents the interests of more than 5 lakh restaurants and as an industry it is valued at 4,23,865 crore.

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