May 24, 2022
NEW DELHI – The Department of Consumer Affairs (DoCA) has cautioned restaurants against forcing consumers to pay service charges.
In a letter written by Rohit Kumar Singh, Secretary, Department of Consumer Affairs (DoCA) to the President, National Restaurant Association of India, it has been pointed out that the restaurants and eateries are collecting service charges from consumers by default, even though the collection of any such charge is voluntary and at the discretion of consumers and not mandatory as per the law.
It has been pointed out in the letter that the consumers are forced to pay service charges, often fixed at arbitrarily high rates by restaurants.
Consumers are also being falsely misled on the legality of such charges and harassed by restaurants on making a request to remove such charges from the bill amount. “Since this issue impacts consumers at large on a daily basis and has significant ramifications on the rights of consumers, the department construed it necessary to examine it with closer scrutiny and detail,” the letter further adds.
The DoCA has called a meeting on 2 June with the National Restaurant Association of India to discuss the issues pertaining to the service charges levied by restaurants. The DoCA has taken notice of a number of media reports as well as grievances registered by consumers on the National Consumer Helpline (NCH).
The issues that would be discussed during the meeting include: restaurants making service charges compulsory, adding service charges to the bill in the guise of some other fee or charge, suppressing from consumers information that paying service charges is optional and voluntary and embarrassing consumers in case they object to paying the service charges.
It is relevant to mention that the DoCA has already published guidelines on 21 April 2017 on the charging of service charges by hotels/restaurants. The guidelines note that the entry of a customer in a restaurant cannot by itself be construed as a consent to pay service charges.