CHENNAI: Ever wondered why your restaurant bills show a different figure from the one you calculated? While service tax and Value Added Tax (VAT) have always been part of the bill, restaurants have been adding a service charge for a while now.
And customers are clueless about the 10 per cent additional service charge which the restaurants include in the bill. “I am not aware of such a thing called service charge. I just pay the amount mentioned in the bill and think that even the service charge is part of the bill,” says Nikesh Kannan. Like Nikesh, many do not see the bill division. They check the total amount and pay it. Service charge inflates the bill and customers end up paying extra. Most consumers are under the assumption that service charge is similar to service tax, which is laid down by the government. “The restaurants charge any rate between 4 per cent and 10 per cent,” says Rohan, a CA student. Unlike service tax, service charge is not fixed and can vary as there are no proper guidelines.
Sreenivasan, secretary of Tamil Nadu Hotels Association, says that it is the restaurant’s wish to charge depending upon the service they have rendered. “Most star hotels have service charges while small hotels don’t. The hotels can fix any percentage as service charge,” he says. “Good business is more important to us than charging extra. If a coffee costs `20, the bill is for the same amount. The customers stop coming here if we charge extra,” says Manikandan, manager of Raj Bhavan Hotel.Service charge is shared among the employees of the restaurant, similar to the concept of paying tips. “Paying service charge should be within the interest of an individual. Questions can be raised about paying service charge. If a person brings this up as an issue, we can take up the case and see what can be done. The youngsters should raise their voice,” says a lawyer, who handles consumer cases.