Background
A clash occurred between restaurant staff and a group of customers at a restaurant in Noida’s Spectrum Mall on Monday over the payment of service charges amounting to ₹970.
Following the dispute, the Department of Consumer Affairs issued a notice stating that customers have the option to choose whether or not to pay the service tax at a restaurant and have the right to ask the hotel authorities to remove them.
Importance of the notice
The Department of Consumer Affairs (DoCA) pointed out that service charges are charges based on discretion, and are not absolute, and thus should not be forcefully levied on the customers, especially if the customers are dissatisfied with the service provided by the restaurant.
According to the Department of Consumer Affairs (DoCa), restaurant patrons have the right to request the removal of the service charges from the bill. Department Secretary Rohit Kumar has urged the hospitality industry to advise the members not to insist on levying a service charge, especially when a request for the removal of the same has been made with the restaurant or hotel authorities.
Involvement of the concerned authorities
The notice has been sent as a letter to Kabir Suri, President of the National Restaurant Association of India (NRAI), and Suresh Poddar, President of the Federation of Hotel and Restaurant Association of India (FHRAI). The letter clarifies that any charge, such as a service charge is like a tip or gratuity, which a consumer may decide to pay voluntarily depending upon his or her discretion and the quality and quantity provided by the restaurant or hotel.
NRAI President Kabir Suri was quoted as saying that the body has taken note of the letter, while another member of the same organization pointed out that service charges are commonly distributed among the entire staff and are also levied at various places, including airports, railways, and taxis.
Guidelines regarding the levying of service charges
Last year, to address the issue of violations of consumer rights in hotels and restaurants, The Central Consumer Protection Authority (CCPA) issued guidelines to prevent the same. These guidelines state that levying a service charge at hotels or restaurants by default is not following the law, and thus, if one cannot be compelled to pay a service charge at a hotel or restaurant and if the hotel or restaurant forces one to pay the same, then a formal complaint can be filed against this practise.
The guidelines regarding service charges are as follows:
- Hotels or restaurants can not automatically or by default levy a service charge.
- The hotel authorities are not allowed to collect the service charge under other names.
- The hotel authorities must make the customers aware that payment of service charges is voluntary/optional.
- Restaurants and hotels cannot restrict entry or the provision of services based on the payment of the service charges by the customer.
If the hotel authorities force the customer to pay service charges, then it would violate the issued guidelines, and one can file a complaint against the hotel authorities to the National Consumer Helpline (NCH) by either calling 1915 or on the NCH mobile app or with the Consumer Commission through their e-daakhil portal (www.e-daakhil.nic.in) or take up their grievances with the concerned District Collector or the Central Consumer Protection Authority (CCPA) by writing to them at [email protected].
Other instances
A similar instance took place last year, wherein several complaints were lodged at the National Restaurant Association of India (NRAI) by customers stating that they were forced to pay the service charges, as a result of which the Central Consumer Protection Authority (CCPA), falling under the purview of Ministry of Consumer Affairs (MoCA), stepped in and declared that no hotels or restaurants shall charge service tax by default to the bill.
