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Restaurants forcing customers to pay service charge, misleading them on legalities: Govt takes note

A meeting has been convened after the Consumer Affairs Ministry took note of a number of media reports as well as grievances registered by consumers on the National Consumer Helpline (NCH).

PTI Reported by: PTI New Delhi Published on: May 24, 2022 10:41 IST
service charge issue by restaurants
Image Source : PTI

Consumer Affairs Min calls meeting of restaurant body to discuss service charge issue

Highlights

  • Consumers are forced to pay service charge, often fixed at arbitrarily high rates by restaurants
  • Consumers are also being "falsely misled" on the legality of such charges
  • They are being harassed by restaurants on making a request to remove such charges from the bill

The consumer affairs ministry has called a meeting on June 2 with the National Restaurant Association of India (NRAI) to discuss about growing complaints that consumers are being forced to pay service charge.

The meeting comes as a result of the ministry taking notice of a number of media reports as well as grievances registered by consumers on the National Consumer Helpline (NCH).

Consumer Affairs Secretary Rohit Kumar Singh has also written to NRAI President pointing out that restaurants and eateries are collecting service charge from consumers by default, even though collection of any such charge is voluntary.

The Secretary has also pointed in the letter that consumers are forced to pay service charge, often fixed at arbitrarily high rates by restaurants.

Consumers are also being "falsely misled" on the legality of such charges and harassed by restaurants on making a request to remove such charges from the bill amount.

“Since this issue impacts consumers at large on a daily basis and has significant ramification on the rights of consumers, the department construed it necessary to examine it with closer scrutiny and detail," the letter added.

During the June 2 meeting, the ministry plans to discuss consumer complaints on inclusion of service charge in the bill in the guise of some other fee or charge.

The meeting will also deliberate how consumers are kept in dark that paying service charge is optional and voluntary and how they are made to feel embarassed in case they resist from paying service charge.

In April 2017, the ministry had issued guidelines on charging of service charge by hotels/restaurants.

The guidelines note that entry of a customer in a restaurant cannot be itself construed as a consent to pay service charge. Any restriction on entry of the consumer by way of forcing her/him to pay service charge as a condition for placing an order amounts to "restrictive trade practice" under the Consumer Protection Act.

The guidelines clearly mention that placing of an order by a customer amounts to his/her agreement to pay the prices displayed on the menu card along with the applicable taxes.

Charging for anything other than the aforementioned, without consent of the customer would amount to unfair trade practice as defined under the Act.

As per the guidelines, a customer is entitled to exercise his/her rights as a consumer to be heard and redressed under provisions of the Act in case of unfair/restrictive trade practices.

Consumers can approach a Consumer Disputes Redressal Commission / Forum of appropriate jurisdiction.

(Except for the headline, Indiatvnews.com has not edited the copy)

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