Explaining service charge by restaurants and the unsavoury row over it
2 years, 9 months ago

Explaining service charge by restaurants and the unsavoury row over it

Firstpost  

The restaurant association in India and the government are at loggerheads over service charge. Terming the service charge illegal at restaurants, the consumer affairs ministry has asked the National Restaurant Association of India to immediately stop the practice. The department, which comes under the Ministry of Consumer Affairs, Food, and Distribution, had chalked the guidelines after noticing that some hotels and restaurants are charging tips from customers “without their express consent in the name of service charges”; some are restraining consumers from entering their premises if they do not agree to pay a service charge, and customers are paying tips to waiters in addition to service charge under the mistaken impression that it is part of the taxes. The consumer affairs department officials told the hotel and restaurant representatives that an “additional charge in the name of service charge is detrimental to the rights of consumers”. The ministry, however, stated, “Considering entry of a customer to a restaurant/hotel as an implied consent to pay service charge would amount to imposition of an unjustified cost on customer as a condition precedent to placing an order for food and would fall under restrictive trade practice under the Act.” The NRAI has claimed in a statement that the department will review all inputs before deciding on the matter.

Consumer Charge Consumer Affairs Charges Service Department Ministry Consumers Service Charges Affairs Service Charge Nrai Restaurants Restaurant Unsavoury Row  charge  charges  restaurants  restaurant  affairs  explaining  ministry  department  consumers  consumer  service  unsavoury  row

History of this topic

YouTuber hails restaurant’s ‘no service charges’ policy; netizens aren’t impressed: ‘Jitne ka pudina paratha hai…’
3 months ago

YouTuber hails restaurant’s ‘no service charges’ policy; netizens aren’t impressed: ‘Jitne ka pudina paratha hai…’

Live Mint  

A YouTuber recently took to social media to praise a restaurant's ‘No Service Charges’ policy. While Ishan wanted to draw attention towards the restaurant's ‘no service charges’ policy, he drew flak from social media users for paying ₹10,030 for Paneer Khurchan, Daal Bukhara, Pudina Paratha, Khasta Roti, and Paneer Makhni. Social media reaction to YouTuber's post A few users questioned …

How demands for US-style tipping are on the rise in UK hotels and cafes... but hard-up Brits are NOT giving in
3 months, 2 weeks ago

How demands for US-style tipping are on the rise in UK hotels and cafes... but hard-up Brits are NOT giving in

Daily Mail  

A growing number of British hospitality and service providers are adopting a US-style tipping culture, with gratuities prompts routinely added to card payment machines. A growing number of British hospitality and service providers are adopting a US-style tipping culture, with gratuities prompts routinely added to card payment machines But despite the strong nudge from businesses, the UK public is in …

Is it time for restaurants to ditch optional service charges? Join The Independent Debate
5 months, 2 weeks ago

Is it time for restaurants to ditch optional service charges? Join The Independent Debate

The Independent  

Stay ahead of the curve with our weekly guide to the latest trends, fashion, relationships and more Stay ahead of the curve with our weekly guide to the latest trends, fashion, relationships and more Stay ahead of the curve with our weekly guide to the latest trends, fashion, relationships and more SIGN UP I would like to be emailed about …

The Great Tipping Debate: Has charging for service gone too far in the UK?
5 months, 2 weeks ago

The Great Tipping Debate: Has charging for service gone too far in the UK?

The Independent  

It’s a truth universally acknowledged that the British public are generally polite, often to the point of apologising when someone steps on their foot. What we have now is this awkward, convoluted system where service charges and tipping are tangled together, leaving diners unsure whether they’re paying for good service or simply subsidising a broken pay structure. Maybe one day, …

Expert reveals how much you really need to tip for goods and services - and it's less than you think
5 months, 3 weeks ago

Expert reveals how much you really need to tip for goods and services - and it's less than you think

Daily Mail  

How much to tip - especially when service charge is already included on your bill - is something that's a constant source of bafflement to Brits. Restaurants and cafes: 10 - 15 per cent Many restaurants in the UK, especially in London and other big cities, now include a service charge in the bill - usually of 12.5 per cent. …

OK, But What Are The Service Charges On My Restaurant Bill?
6 months, 3 weeks ago

OK, But What Are The Service Charges On My Restaurant Bill?

Huff Post  

igor kisselev, www.close-up.biz via Getty Images One type of extra fee that’s becoming common in the hospitality world is a “service charge.” It seems like the cost of going out to eat at a restaurant is always a hot topic for debate; between rising prices, gratuity requests popping up at counter-service spots and seemingly random surcharges, many diners now find …

Restaurants may be able to keep service fees if menu shows the charges
9 months, 2 weeks ago

Restaurants may be able to keep service fees if menu shows the charges

LA Times  

A new state law to prohibit hidden surcharges and other “junk fees” tacked onto customers’ bills is slated to go into effect July 1, with businesses having to include those charges in the prices they post or advertise. Under the proposal by Sen. Bill Dodd, restaurants could continue to add surcharges, mandatory gratuities or fees to diners’ bills instead of …

What does a service fee ban mean for diners? Expect higher menu prices — a lot higher
1 year, 1 month ago

What does a service fee ban mean for diners? Expect higher menu prices — a lot higher

LA Times  

Coming this summer is a new state law that bans unadvertised service fees, surcharges and other additional costs that are added to the end of a bill for meals or delivery service. Gavin Newsom signed into law in October, is set to prohibit “junk fees” across a wide swath of businesses, including online ticket sales, hotels, restaurants, bars and delivery …

To tip or not to tip and the dilemma of a service charge
1 year, 5 months ago

To tip or not to tip and the dilemma of a service charge

Live Mint  

A tip, an age-old appreciation of good service, is no longer a simple matter. It can be a service charge included in some restaurant bills or an online cue to “add a tip" for a food delivery agent or cab driver. In response, the income tax department had clarified that firms are liable to pay income tax on service charge …

Replace ‘service charge’ on bills with ‘staff contribution’, says Delhi HC
1 year, 6 months ago

Replace ‘service charge’ on bills with ‘staff contribution’, says Delhi HC

The Hindu  

The Delhi High Court has asked the members of a hospitality industry body to use the term ‘staff contribution’ instead of ‘service charge’ for the amount they charge patrons. The direction on Tuesday came while hearing petitions against guidelines prohibiting hotels and restaurants from automatically levying ‘service charge’ on food bills. The Central Consumer Protection Authority had on July 4, …

This Reddit list is tracking L.A. restaurants charging ‘service fees’
1 year, 7 months ago

This Reddit list is tracking L.A. restaurants charging ‘service fees’

LA Times  

Patrons eat lunch at Jon & Vinny’s restaurant in Brentwood. This is to say nothing of service charges, typically ranging from 3% to 20%, that are tacked onto restaurant customers’ bills with various disclaimers, some more opaque than others, such as “healthcare surcharge,” “competitive industry compensation” and “wellness fee.” A Google spreadsheet circulating in Reddit’s Los Angeles group has gained …

Delhi HC slaps ₹1 lakh fine on restaurant associations for non-compliance of service charge directions
1 year, 7 months ago

Delhi HC slaps ₹1 lakh fine on restaurant associations for non-compliance of service charge directions

Live Mint  

The Delhi High Court has imposed a fine of ₹1,00,000 on the National Restaurant Association of India and the Federation of Hotel & Restaurant Associations of India to pay as costs for non-compliance of service charge directions issued on 12 April. Additionally, they were required to submit a specific affidavit addressing key aspects, such as the percentage of members imposing …

Scuffle over service charge: To pay or to not pay?
1 year, 9 months ago

Scuffle over service charge: To pay or to not pay?

Hindustan Times  

Recently, a scuffle broke out between a group of diners and staff at Float by Duty Free, a restaurant in Noida, over the latter levying a service charge of ₹970 on a bill of ₹11,209. This incident is the latest of many to bring the contentious issue of service charge into the limelight, raising questions about its legality and lack …

Letters to the Editor: ‘I detest American tipping culture’ — the case for just paying workers more
1 year, 10 months ago

Letters to the Editor: ‘I detest American tipping culture’ — the case for just paying workers more

LA Times  

Meeka Smith, visiting from Baltimore, shows her receipt that includes a mandatory 15% service charge and a tip she left at a restaurant in Venice. It’s not right for a business to surprise a customer with a bill showing added charges for “kitchen support” or “health insurance.” That happened to me twice recently, and in both cases I did not …

HC: Dont display verdict allowing service charge on restaurant menus
1 year, 11 months ago

HC: Dont display verdict allowing service charge on restaurant menus

Hindustan Times  

The Delhi high court on Wednesday clarified that its interim order, allowing restaurants across the country to automatically charge service charge above the bill, will not be displayed on the menu cards or on display boards in a manner to mislead the consumers that service charge has been finally approved by the court. The court’s clarification came while hearing pleas …

On row over service charge at restaurants, Delhi high court has a suggestion
1 year, 11 months ago

On row over service charge at restaurants, Delhi high court has a suggestion

Hindustan Times  

NEW DELHI: The Delhi high court on Wednesday told restaurant owners not to display the court’s interim order relating to a service charge on their menu cards or display boards in a manner to mislead the consumers that the service charge has been finally approved by the court. Justice Pratibha Singh took note of ASG Chetan Sharma’s submission that restaurants …

Why restaurants should recover service charges from consumers as 'additional', 'separate levy', asks Delhi HC
2 years, 7 months ago

Why restaurants should recover service charges from consumers as 'additional', 'separate levy', asks Delhi HC

India TV News  

Why restaurants should recover service charges from consumers as 'additional', 'separate levy', asks Delhi HC The high court was hearing an appeal by the Centre against a single judge's order staying its guidelines prohibiting hotels and restaurants from levying service charges automatically on food bills. The Delhi High Court on Tuesday questioned why restaurants should recover service charges from consumers …

HC stays guidelines prohibiting levying of service charge by restaurants
2 years, 8 months ago

HC stays guidelines prohibiting levying of service charge by restaurants

The Hindu  

The Delhi High Court on July 20 stayed the recent guidelines issued by the Central Consumer Protection Authority banning restaurants and hotels across the country from levying service charge by adding it along with the food bill. The high court said that CCPA’s guidelines, which effectively barred restaurants and hotels from adding service charge automatically or by default in the …

HC stays guidelines prohibiting levying of service charge by restaurants
2 years, 8 months ago

HC stays guidelines prohibiting levying of service charge by restaurants

Firstpost  

Justice Yashwant Varma, while dealing with petitions challenging the Central Consumer Protection Authority’s 4 July guidelines, said the issue requires consideration and directed the authorities to file their reply. New Delhi: The Delhi High Court on Wednesday stayed the recent guidelines prohibiting hotels and restaurants from levying service charge automatically on food bills. Justice Yashwant Varma, while dealing with petitions …

Staff will suffer, feels restauranteurs; customers happy
2 years, 8 months ago

Staff will suffer, feels restauranteurs; customers happy

Hindustan Times  

On Monday, the Central Consumer Protection Authority prohibited eateries from automatically or by default levying service charges on food bills. As Central Consumer Protection Authority has prohibited eateries from automatically or by default levying service charges on food bills, restaurateurs feel this isn’t in the welfare of their staff. Umang Tewari, owner, Local, Junkyard and Liv Bar, says, “The service …

Customers happy, restaurateurs upset over removal of service charges
2 years, 8 months ago

Customers happy, restaurateurs upset over removal of service charges

The Hindu  

While the Central Consumer Protection Authority’s recent announcement which tagged service charges “unfair” has sparked joy among bill paying consumers, the same is not the case for those who own and run hotels and restaurants. To protect consumer interest on behalf of our hotel owners, we welcome this decision and also advise all our members to do the needful.” The …

Next time hotels, restaurants add service charge to your bill, just dial this number
2 years, 8 months ago

Next time hotels, restaurants add service charge to your bill, just dial this number

India Today  

In a relief for customers, the Central Consumer Protection authority under the Department of Consumer Affairs has barred hotels and restaurants from levying service charges automatically or by default on food bills. So, next time if a hotel or restaurant adds a service charge to your bill, don't pay the extra amount, as the CCPA has also allowed customers to …

Levied with a service charge at an eatery? Here’s what you can do
2 years, 8 months ago

Levied with a service charge at an eatery? Here’s what you can do

Firstpost  

The government has enabled customers to file complaints in case of violations after they stipulated that the service charge levied by restaurants and eateries was an ‘unfair trade practice’ Eating out in the country just got cheaper — almost by 10 per cent! On 4 July, the Central Consumer Protection Authority barred hotels and restaurants from levying service charge automatically …

Hotels, restaurants should not force consumers to pay service charge: CCPA
2 years, 8 months ago

Hotels, restaurants should not force consumers to pay service charge: CCPA

Hindustan Times  

The Union consumer affairs ministry on Monday directed hotels and restaurants to not add service charges automatically or by default to the bill. “The guidelines issued by CCPA stipulate that hotels or restaurants shall not add service charge automatically or by default in the food bill. No hotel or restaurant shall force a consumer to pay the service charge and …

Hotels, restaurants barred from levying service charge
2 years, 8 months ago

Hotels, restaurants barred from levying service charge

India Today  

The Central Consumer Protection Authority on Monday barred hotels and restaurants from levying service charge automatically or by default in food bills and allowed customers to file complaints in case of violation. Amid rising complaints, the CCPA has issued guidelines for preventing unfair trade practices and violation of consumer rights with regard to levying of service charge. As per the …

Hotels, restaurants cannot force consumers to pay service charge. It's voluntary
2 years, 8 months ago

Hotels, restaurants cannot force consumers to pay service charge. It's voluntary

Hindustan Times  

Hotels and restaurants are now barred from levying service charges automatically or by default on food bills, the Central Consumer Protection Authority said on Monday, adding customers will be allowed to file complaints in case of violation. The service charge can also not be collected by adding it along with the food bill and levying the Goods and Services Tax …

Service Charge Cannot be Added by Default by Hotels, Restaurants; CCPA Issues Guidelines
2 years, 8 months ago

Service Charge Cannot be Added by Default by Hotels, Restaurants; CCPA Issues Guidelines

News 18  

The Central Consumer Protection Authority, or CCPA, has on Monday issued an order barring hotels and restaurants from adding service charge automatically or by default in the food bill. The top consumer authority on the day issued guidelines for preventing unfair trade practices and violation of consumer rights with regard to levying of service charge in hotels and restaurants. “The …

Why there is a debate over service charge in restaurants
2 years, 9 months ago

Why there is a debate over service charge in restaurants

India Today  

Working in the hospitality industry is not easy. That the service charge attracts GST further confirms this,” says Anurag Katriar, trustee at NRAI, and founder and managing director, Indigo Hospitality Pvt Ltd. Katriar finds the argument that menu prices be increased instead of levying service charge separately “misplaced”. From my experience, at our restaurants, only one in ten guests debates …

As Service Charge Is Being Opposed, Will Restaurants Go For Price Hikes?
2 years, 9 months ago

As Service Charge Is Being Opposed, Will Restaurants Go For Price Hikes?

News 18  

As the consumer affairs ministry has already called levying the service charge illegal, restaurants are saying it’s very much legal until the final rules come in. Last week, during a meeting with restaurant and hotel bodies, consumer affairs secretary Rohit Kumar Singh said that even as restaurant associations claim the practice of levying service charge is legal, the consumer affairs …

Service Charge Levied by Restaurants is Legal in India? Here Is What We Know
2 years, 9 months ago

Service Charge Levied by Restaurants is Legal in India? Here Is What We Know

News 18  

A row has recently sparked up regarding the act of restaurants levying service charges on customers with the consumer affairs ministry calling for a robust framework, and the restaurants saying that the same is very much legal in India until further notice. The department of consumers affairs has called levying service charge by restaurants an “unfair trade practice”, but there …

Eateries hint at legal face-off with government over service charge
2 years, 9 months ago

Eateries hint at legal face-off with government over service charge

Hindustan Times  

Restaurants will not be able to force diners to pay a service charge, according to new rules being framed by the ministry of consumer affairs, but eateries aren’t conceding yet. Restaurants and hotels can “raise prices but cannot levy service charges without the customer’s explicit consent”, commerce and consumer affairs minister Piyush Goyal said on Friday. On Thursday, the government …

Eateries, govt lock horns on service charge
2 years, 9 months ago

Eateries, govt lock horns on service charge

Hindustan Times  

New Delhi: Restaurants will not be able to force diners to pay a service charge, according to new rules being framed by the consumer affairs ministry but eateries aren’t conceding yet. Union commerce and consumer affairs minister Piyush Goyal on Friday said restaurants and hotels can “raise prices but cannot levy service charges without the customer’s explicit consent”. On June …

Service charge issue: Restaurants body, owners says govt's move unfortunate
2 years, 9 months ago

Service charge issue: Restaurants body, owners says govt's move unfortunate

Firstpost  

The government’s move will be a ‘loss’ to the ordinary staffers only. It is meant for the staff who render services to guests and divided among all the serving staff at a restaurant, which they receive it over and above their salaries, said NRAI president Kabir Suri New Delhi: A national food industry body and several restaurant owners on Friday …

Restaurants can’t impose ‘service charge’ to food bills: Piyush Goyal
2 years, 9 months ago

Restaurants can’t impose ‘service charge’ to food bills: Piyush Goyal

The Hindu  

Food and Consumer Affairs Minister Piyush Goyal on June 3 asserted that restaurants cannot add ‘service charge’ to the food bills, though customers at their discretion can give “tips” separately. On June 2, the consumer affairs ministry said the government will soon come out with a legal framework to stop restaurants from imposing service charges on customers as the practice …

Centre to come up with framework to check service charge levied by restaurants
2 years, 9 months ago

Centre to come up with framework to check service charge levied by restaurants

Firstpost  

Service charge is used by restaurants/hotels to pay the staff and workers and is not charged for the experience or food served to consumer New Delhi: The Department of Consumer Affairs will soon come up with a robust framework to ensure strict compliance by the stakeholders with regard to service charge levied by restaurants and hotels as it adversely affects …

To Pay or Not? News18 Decodes the Service Charge in Restaurant Bills & Why is it 'Illegal'
2 years, 9 months ago

To Pay or Not? News18 Decodes the Service Charge in Restaurant Bills & Why is it 'Illegal'

News 18  

The Department of Consumer Affairs has observed that restaurants levying service charge from customers as the practice is an “unfair trade practice”. However, consumer organisations observed that levying service charge is patently arbitrary and constitutes an unfair as well as restrictive trade practice under the Consumer Protection Act. Further, considering entry of a customer to a restaurant/hotel as an implied …

Centre to soon come up with framework to check 'service charge' levied by restaurants
2 years, 9 months ago

Centre to soon come up with framework to check 'service charge' levied by restaurants

India TV News  

Highlights Department of Consumer Affairs will soon come up with a robust framework It's to ensure strict compliance by stakeholders with regard to service charge levied by restaurants Dept held a meeting on June 2 with restaurant associations and consumer organizations on this matter The Department of Consumer Affairs will soon come up with a robust framework to ensure strict …

Centre will bar restaurants from levying service charge
2 years, 9 months ago

Centre will bar restaurants from levying service charge

Hindustan Times  

The government will frame new rules, along with a legal framework, to prevent restaurants from levying service charge on diners, which is an “unfair trade practice”, consumer affairs secretary Rohit Kumar Singh said on Thursday. Consumers often mix up “service charge” imposed by eateries with service tax, which is a statutory levy under the Goods and Services Tax or GST, …

Levying service charge legal, restaurant associations tell Consumer Affairs Department
2 years, 9 months ago

Levying service charge legal, restaurant associations tell Consumer Affairs Department

The Hindu  

In a meeting called by the Department of Consumer Affairs on Thursday to seek clarification on restaurants levying service charge “by default” on consumers, the National Restaurants Association of India and The Federation of Hotel & Restaurant Associations of India clarified that there was no illegality in levying such a charge. The association also said that various judicial orders have …

Centre to formulate legal framework to stop eateries from levying service charge
2 years, 9 months ago

Centre to formulate legal framework to stop eateries from levying service charge

Firstpost  

Consumer organisations observed that levying service charge is patently arbitrary and constitutes an unfair as well as restrictive trade practice under the Consumer Protection Act New Delhi: The government will soon come out with a legal framework to stop restaurants levying service charge from customers as the practice is “unfair”, Consumer Affairs Secretary Rohit Kumar Singh said on Thursday. Consumer …

Service Charge By Restaurants Illegal, Says Govt; Asks NRAI To Immediately Stop It
2 years, 9 months ago

Service Charge By Restaurants Illegal, Says Govt; Asks NRAI To Immediately Stop It

News 18  

The consumer affairs ministry on Thursday called the service charge levied by restaurants illegal and asked the National Restaurant Association of India to immediately stop the practice. In a letter to the NRAI recently, Department of Consumer Affairs Secretary Rohit Kumar Singh pointed out that the restaurants and eateries are collecting the service charge from consumers by default, even though …

Levying service charge not unfair trade practice: NRAI
2 years, 9 months ago

Levying service charge not unfair trade practice: NRAI

Hindustan Times  

The National Restaurant Association of India on Tuesday said that asking for service charge is not an unfair trade practice, and contended that once a customer is aware of such a charge and goes on to place an order anyway, the act of doing so becomes an agreement between the parties. It added that service charge — or fee charged …

Service Charge In Restaurants Voluntary Not Mandatory; Forcible Imposition Constitutes Unfair Trade Practice : Consumer Commission
3 years, 2 months ago

Service Charge In Restaurants Voluntary Not Mandatory; Forcible Imposition Constitutes Unfair Trade Practice : Consumer Commission

Live Law  

The Kolkata District Consumer Disputes Redressal Forum has recently ruled that restaurants cannot forcibly impose service charge on a customer and accordingly proceeded to direct the concerned restaurant to hand back the service charge it collected from a customer along with a compensation amount. A Bench comprising President Swapan Kumar Mahanty and member Ashok Kumar Ganguly held that imposing a …

Tipping point: The restaurants scrapping ‘discretionary’ service charge
4 years, 7 months ago

Tipping point: The restaurants scrapping ‘discretionary’ service charge

The Independent  

On 7 May this year Jeremy King, co-founder of the London-based Corbin and King restaurant group, made an impassioned plea to all the customers on the mailing lists of their restaurants, which include The Wolsey, Fischers, Brasserie Zedel and The Delaunay. The tronc system is the “discretionary service charge” you find at the bottom of your bill – typically 12.5 …

Service charge not distributed to workers by restaurants liable to income tax: CBDT
6 years, 4 months ago

Service charge not distributed to workers by restaurants liable to income tax: CBDT

Firstpost  

New Delhi: Service charge collected by hotels and restaurants but not passed on to staff and workers will be liable to income tax in the hands of such entities, the tax department has said. The ministry also said that there is “every likelihood” that the service charge amount collected is not even distributed among staff and workers of the hotels …

Service charge back on Pune menus
6 years, 11 months ago

Service charge back on Pune menus

Hindustan Times  

The beginning of the financial year, April, saw the return of service charge, as restaurants and pubs across the city began charging their customers for services rendered. According to National Restaurant Association of India, service charge is a fee charged by the restaurant over and above the price of food and drink for the additional convenience of service rendered inside …

‘Service Charge’ In Hotel Bills Totally Voluntary: Govt Issues Guidelines
7 years, 11 months ago

‘Service Charge’ In Hotel Bills Totally Voluntary: Govt Issues Guidelines

Live Law  

‘Service charge column of the bill may be left blank for the customer to fill up before making payment’The Food and Consumer Affairs Ministry has made it clear that Service Charge on hotel and restaurant bills is totally voluntary and not mandatory, and Hotels/Restaurants cannot decide how much Service Charge is to be paid by the customer & it should …

‘Service Charge’ In Hotel Bills Totally Voluntary: Govt Issues Guidelines
7 years, 11 months ago

‘Service Charge’ In Hotel Bills Totally Voluntary: Govt Issues Guidelines

Live Law  

‘Service charge column of the bill may be left blank for the customer to fill up before making payment’The Food and Consumer Affairs Ministry has made it clear that Service Charge on hotel and restaurant bills is totally voluntary and not mandatory, and Hotels/Restaurants cannot decide how much Service Charge is to be paid by the customer & it should …

Restaurants cant fleece you any more, govt makes service charge voluntary
7 years, 11 months ago

Restaurants cant fleece you any more, govt makes service charge voluntary

India TV News  

The government has decided to issue an advisory to states asking them to crack down against unfair imposition of service charge on food and drink bills. Food and Consumer Affairs Minister Ram Vilas Paswan today said that no such thing as the service charge exists and that it was being wrongly charged. We cannot understand why we are being singled …

Discover Related