Department of Consumer Affairs to introduce framework for service charge by eateries soon

NEW DELHI: The Department of Consumer Affairs (DoCA) on Thursday said they 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 consumers on a daily basis. In the meeting held today between consumer affairs ministry, restaurant associations and consumer organisations, the issue of levy of service charge in hotels and restaurants was discussed.

The government and restaurant associations have been at loggerheads over service charge – which is essentially a tip that’s added to the customer’s bill mandatorily by some restaurants to provide for their services. The restaurant associations observed that when service charge is mentioned on the menu, it involves an implied consent of the consumer to pay the charge.

The National Restaurant Association of India (NRAI) president said on behalf of the entire restaurant industry, they have firmly reiterated all facts with proof to the department that levy of service charge is neither illegal, nor an unfair trade practice as alleged, and this debate in public domain is creating unnecessary confusion and disruption in smooth operations of restaurants.

Once a customer places an order, a contract comes into existence, there is an offer by the restaurant to provide the food on the menu and it is up to the customer to accept the offer of the restaurant or not while placing his order in the restaurant, NRAI said in a statement. “The customer has to exercise the option at that point of time whether to accept the offer of the price of the product plus service charge or not to accept the said offer. The option cannot be exercised after consuming the food and complaining about the levy of service charge.”