Service charge

Service charge | FHRAI: Service charges are not illegal or against the law : FHRAI

After clarification by the National Restaurant Association of India (NRAI) regarding the issue of service charges, the hospitality industry association Federation of Hotel and Restaurant Associations of India (FHRAI) clarified that a service charge, like any other fee collected by an establishment, is part of the “invitation” offered by the restaurant to potential customers.

The association said it was up to customers to decide whether they wanted to frequent said restaurant or not. To discuss and seek clarification on the matter, the Department of Consumer Affairs (DoCA) convened the FHRAI for a meeting on June 2.

“The service commission is considered as an advantageous payment since it is intended for the benefit of the personnel of the establishment. Thus, certain establishments make the conscious choice to adopt an advantageous policy towards its members of staff by assuring them a minimum tip which is a percentage of There is nothing illegal or against the law for restaurants to charge service fees,” said Gurbaxish Singh Kohli, Vice President of FHRAI.

FHRAI said the service charge, colloquially referred to as a “tip,” is the amount paid to staff at the restaurant or other similar establishment by its guest. In some cases, a restaurant may choose to include the service charge amount in the invoice and the percentage may vary from 5-15% of the invoiced value. It is a common and accepted practice in India as well as several other countries, the association said.

“It is entirely at the restaurant’s discretion whether or not to charge a service charge. If a customer has any objection to paying a service charge, it may be removed from the bill,” said Pradeep Shetty, co-secretary. FHRAI honorarium.

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“It is common practice even among other service providers, who charge certain “convenience fees” for providing services to customers. Services such as booking train and air tickets through websites or portals, food ordered through website or mobile apps, or movie tickets booked online portals all levy convenience fees on customers.But, it is sad to see constant demands from the hospitality industry on one subject or the other,” he added. aware of these fees before availing themselves of the services.

“We have also informed our members that in the event that they choose to collect a service charge on behalf of their staff by including it in the invoice presented to the customer, they must clearly indicate this on their menu itself so that the customer be well informed of the same,” Kohli said.

“Convenience fees charged by other service providers do not come with prior notification unlike the service fees which are mentioned as chargeable in the menu card. In addition to this, if the customer does not wish to pay the service fee we are happy to waive or, if the customer mentions before the invoice that he does not wish to pay a service fee, the service fee is not charged.This refund or waiver option is not not available on convenience fees charged by other service providers,” he added.