Chandigarh Restaurants and Bars affected with Servcie Charge made optional
Chandigarh: Many top restaurants in Chandigarh were charging 10-15% as service charge hidden among various taxes already charged by the government. Clearly, many of them are not happy with the central government stance highlighting the optional nature of service charge. The Centre reiterated on Monday that customers dissatisfied with service could choose not to pay the service charge levied by a hotel or restaurant, but the National Restaurant Association of India (NRAI) cited judicial precedent to support its case for the levying of a service charge.
It also issued a bizarre statement implying that customers were free not to eat at a restaurant if they did not wish to pay the service charge levied by it. NRAI refused to explain why then Restaurants don’t explain this option available to customers before they enter a restaurant and why service charge amount is semi-hidden in the food bill.
The government had clarified earlier in Parliament that the authorities could act against those levying a service charge without the knowledge+ and consent of consumers on charges of indulging in “unfair trade practices”. NRAI, which represents independent restaurants and chains, said levying service charge was a “common and accepted practice” that was “recognised as such” by various government departments.
A statement issued on Monday by the Union consumer affairs ministry said it had asked states to ensure hotels and restaurants displayed information that service charge was optional on their premises. The ministry said this was being done as it had received many complaints from customers who said they were being forced to pay service charge, in lieu of tips, of anything between 5% and 20% “irrespective of the kind of service provided”. The ministry said the Hotel Association of India, when asked for clarification, replied that a “service charge is completely discretionary” and a customer could have it waived.
Defending the levying of service charge, NRAI president Riyaaz Amlani told TOI that restaurants clearly follow the very same Consumer Protection Act that is being used to justify the move to penalise those who levy it without the consent of consumers. “The act stops us from indulging in any unfair method or deceptive practice. We clearly mention the service charge we levy on our menus. We are not indulging in any unfair trade practice,” he said, adding that they were employee incentives distributed evenly among the work force.
“This is all part of a bill on which the restaurants pay VAT while the employees pay income tax. It also does away with cash tips,” he said. Rather than scrap the service charge, Amlani said, many restaurants would politely ask customers if they were willing to pay a service charge and, if not, tell them they would have to dine at a place that didn’t levy one.
However, many food bloggers called Amlani’s idea as silly as no restaurant would like to lose customers, create a ruckus in their premises and accept poor reviews from frustrated users just to get a small extra amount.