Service charge: To pay or not to pay?

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There have been instances of customers being billed service charges in restaurants. There have been protests against imposing this charge and also in favour. So, is it illegal to charge service charge?

Taking service charge is not illegal. Service charge is a discretionary charge i.e. it is a fee which depends on the customer whether he wants to pay or not. Rohit Kumar, Secretary, Department of Consumer Affairs, Issued a notice after an incident in Noida restaurant that led to a fight on service charge. The notice reiterated that service charge is a discretionary charge. In this notice issued to the National Restaurant Association of India (NRAI) and the Federation of Hotel and Restaurant Association of India (FHRAI), it was said that service charge “should not be forced upon the customer, especially when he is not satisfied with the service of the restaurant.”

 Delhi High Court Order

Last year, the Central Consumer Protection Authority (CCPA) had issued some guidelines regarding service charge. It was said in the guidelines that no hotel or restaurant can automatically or by default add service charge to the food bill. Service charge will not be charged by any other name. These guidelines were challenged in the Delhi High Court.. The Delhi High Court in its interim order stayed these guidelines. However, it did not say that the service charge would be mandatory. But restaurants started taking wrong advantage of this order.

In many restaurants, this order is being displayed on the menu or display board. It is being shown as if it is mandatory to pay service charge, whereas it is not so. The Delhi High Court clarified its stand in April this year saying its guidelines will not be shown in such a way that the consumer  is misled and thinks that the court has approved the levy of service charge.

Kumar also said in the notice that if a consumer requests the restaurant to waive off service charge, then the restaurant should not insist on levying service charge compulsorily.

Now the question arises whether has it ever happened to you that you were not happy with the service of the restaurant? And still you had to pay the service charge. Instead of arguing at that moment, you thought it was better to pay the service charge. But you are feeling cheated yourself and want to complain about it. So do so.

It is not right to fight in a restaurant, but it is not wrong to fight for your rights either. You can tell them that if you like the food and service, only then you will pay the service charg.  If there is a wrong court order regarding service charge written on their menu or on the display board, then talk about it beforehand. This way, you will not have to compromise on your rights and will be able to enjoy the food comfortably with your family and friends.