Service charge

Restaurants cannot add service charges to Goyal food bills

New Delhi, Jun 3 (PTI) Food and Consumer Affairs Minister Piyush Goyal on Friday claimed that restaurants cannot add “service charges” to food bills, although customers, at their discretion , can give “tips” separately.
Goyal said if restaurant owners want to pay their employees higher wages, they are free to raise their menu prices because there are no price controls in the country.
He also dismissed claims by restaurateurs that they would suffer losses if service charges were waived.
On Thursday, the Department of Consumer Affairs said the government would soon introduce a legal framework to prevent restaurants from imposing service charges on customers, as the practice is “unfair”.
“You (restaurants) cannot add a service charge to an invoice… If you feel that additional benefits should be given to employees, it cannot be imposed on customers. You can increase prices to give hikes,” Goyal said in response to a question about the restaurant service charge issue.
The minister said the government was receiving complaints from consumers about service charges imposed by restaurants.
“You’re free to give raises to employees and raise rates. But if there’s a hidden cost, how will people know the real price,” he said.
Goyal also added that people leave tips if they find services to their satisfaction, and they can continue to do so.
On Thursday, the Ministry of Consumer Affairs held a meeting with representatives of restaurant and consumer associations.
After the meeting, Consumer Affairs Secretary Rohit Kumar Singh said the government is of the view that the practice of imposing service charges undermines consumers’ rights and is also an “unfair commercial practice”.
“We will soon work on a legal framework because there were directives from 2017, which they did not apply. The directives are generally not legally enforceable,” he said.
The meeting was attended by representatives from National Restaurant Association of India (NRAI), Federation of Hotel and Restaurant Associations of India (FHRAI) and consumer organizations including Mumbai Grahak Panchayat and Pushpa Girimaji.
The Secretary also informed that a framework in this regard will be released shortly which will be legally binding on restaurants.
An official statement had said that during the meeting, major issues raised by consumers on the department’s National Consumer Helpline were discussed.
These related to the mandatory levying of service charges, the addition of default charges without the express consent of the consumer, the removal of the fact that these charges are optional and voluntary, and the embarrassment of consumers they resist paying these fees. PTI LUX MJH NKD CS BAL