Government calls meeting with NRAI to discuss restaurant service charges

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Forced to pay a service charge at a restaurant or catering outlet of your choice? Do you know that it is completely optional and voluntary, and insisting that it is mandatory violates your right as a consumer?

The government has scheduled a meeting on June 2 with the National Restaurant Association of India to discuss issues relating to “service charges” levied by restaurants across India.

Noting a number of media reports as well as complaints registered by consumers on the National Consumer Helpline (NCH), the Department of Consumer Affairs (DoCA) of the Department of Consumer Food and Public Distribution convened the meeting.

Restaurants making service charges mandatory, adding service charges to the bill under the guise of other fees or charges, stripping consumers that paying service charges is optional and voluntary, and embarrassing consumers in case they would resist paying the service fee would be among the issues that will be discussed at the meeting.

In a letter written by Consumer Affairs Secretary Rohit Kumar Singh to the President of the National Restaurant Association of India, it was pointed out that restaurants and eateries collect service charges from consumers by default, even though the collection of these fees is voluntary and at the discretion of consumers and not mandatory by law.

Consumers are forced to pay service charges, often set at arbitrarily high rates by restaurants, the letter points out and adds, consumers are also misled about the legality of these charges and harassed by restaurants when they ask removal of these fees. of the invoice amount.

“Given that this issue affects consumers as a whole on a daily basis and has significant consumer rights ramifications, the department has found it necessary to examine it more closely and in detail,” the letter adds.

In April 2017, the Department issued guidelines for charging service fees by hotels/restaurants. The guidelines clarify that a customer’s entrance into a restaurant cannot by itself be construed as consent to pay a service charge. Any restriction on entry imposed on the consumer by requiring them to pay a service charge as a condition of placing an order amounts to a “restrictive business practice” under consumer protection law.

The instructions clearly mention that the placing of an order by a customer is equivalent to his commitment to pay the prices displayed on the menu card as well as the applicable taxes. To charge anything other than the above without the express consent of the customer would amount to an unfair commercial practice as defined by law.

“According to the guidelines, a customer has the right to exercise their rights as a consumer to be heard and redressed under the provisions of the law in the event of unfair / restrictive commercial practices. Consumers can apply to a consumer dispute resolution board/forum of the appropriate jurisdiction,” a ministry official said.

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