Consumer Affairs Dept Warns Restaurants Forcibly Charging 'Service Charge' On Consumers

DoCA has scheduled a meeting with the National Restaurant Association of India on June 2, 2022 to discuss the issues pertaining to Service Charge levied by restaurants. 

Consumer Affairs Department has called a meeting with National Restaurant Association of India to discuss the issue of service charges. (Representational)

Source : Getty Images

New Delhi: Department of Consumer Affairs (DoCA) has cautioned restaurants and eateries against charging service charges from customers by default when such charges are voluntary and at the discretion of the consumers and not mandatory as per any law. 

In regard to the same, the DoCA has scheduled a meeting with the National Restaurant Association of India on June 2, 2022 to discuss the issues pertaining to Service Charge levied by restaurants. 

The meeting has been scheduled following a number of media reports as well as grievances registered by consumers on the National Consumer Helpline (NCH). which the DoCA took notice of.  

The consumers are forced to pay service charges, 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, pointed out the letter written to National Restaurant Association of India by Rohit Kumar Singh, Secretary to DoCA President.   

“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 read further.

The following issues pertaining to complaints by consumers would be discussed during the meeting.

• Restaurants making service charge compulsory
• Adding service charge in the bill in the guise of some other fee or charge.
• Suppression from consumers that paying service charge is optional and voluntary.
• Embarrassing consumers in case they resist from paying service charge

DoCA Guidelines Regarding Charging Of Service Charge And Consumer Rights 

The DoCA referred to its guidelines issued April 21, 2017 and stated: 

• Entry of a customer in a restaurant cannot itself be 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 of placing an order amount to ’restrictive trade practice’ under the Consumer Protection Act.
• Placing 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 afore-mentioned without express 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.