Ser‘vice’ charge?
BENGALURU: Days after the Centre’s discussions about the new rules to not levy a service charge on diners surface, Bengaluru restaurateurs debate the effects the law will have on their staff and overall functioning
Dining out is a fun experience that involves a lot of planning – which restaurant to eat at, what to order, etc. And Bengaluru always has tonnes of options to choose from. At the end of a fun-filled night, however, comes the part where we have to pay the bill – and this is the not-sofun part. Because when we look at the bill, we understand that we are not only paying for the food we eat, but we also pay a certain amount in terms of taxes and other services. The question here is: is it fair to make the service charge mandatory for customers? Days after the Centre’s discussions about the new rules to not levy a service charge on diners surface, city’s restauranteurs talk about the effects the law will have on their staff and overall functioning.
“The F & B industry has gone through a huge turmoil during the pandemic with many of the workers being left without a job or having to deal with significant pay cuts,” says Abhay Kewadkar, managing director, Fox in the Field. “The industry norm of service charge is for the benefit of such employees and in this debate of legality, one should not lose focus of this angle,” Kewadkar adds. According to Chethan Hegde, founder, 1522 The Pub, and cofounder of Suzy Q and Street 1522, diners walk-in fully aware of the charges that they will be paying.
At his restaurants, Hegde says that service charges are used to incentivise everyone working with them; from valet staff, washing crew and front desk to cashiers, managers, and head chefs. “Everything is clearly explained to the staff. The incentives are given using a point system which means that the staff is given a percentage of the total service charge received depending on their position and role,” he says. Agrees Prathik Shetty, founder- partner, The Reservoire.
He says the service charge is collected and is straight away forwarded to the staff. “Incentives are a means to encourage and gratify them. When the business is doing well, it’s also because of the staff that is working hard for it,” says Shetty. Incentives do play an important role, says Debaditya Chaudhury, managing director, Chowman, a chain of Chinese restaurants.
According to him, charging extra is unethical to an extent. “We believe in affordability and while guests are already paying their GST, charging an additional service charge makes no sense. As an incentive to the server, we do accept tipping but that is entirely an individual choice,” Chaudhury adds.
While most e-commerce sites take service charges in the name of convenience fees, guests at restaurants should have the freedom to make the decision, Shetty says. “We request the government to keep the service charge and that it will be clearly communicated to the guests. If they are not happy with the service, we will definitely take off the service charge,” he says.