The Ministry of Consumer Affairs, Food and Public Distribution has released new guidelines for restaurants with respect to levying service charge. On Monday, a statement was released by Union Minister Piyush Goyal about this latest development calling it an 'unfair trade practice' and a 'violation of consumer rights.' The press release by the Central Consumer Protection Authority (CCPA) stated that no hotels or restaurants can add service charge by default to the food bill. Further, consumers cannot be forced to pay this charge as it is voluntary and optional, and it shall not be collected by any other name either.
There will also be no restriction on entry or provision of services on the basis of this charge. In case any consumer finds service charge still being levied, they can request it to be removed or else file a complaint. The National Consumer Helpline (NCH) number 1915 can be called for speedy redressal. Complaints can also be filed on the NCH mobile application or e-daakhil portal.
Safeguarding Consumer Rights!— Piyush Goyal (@PiyushGoyal) July 4, 2022
In a bid to protect consumers from unfair charges, hotels & restaurants can no longer levy service charge automatically or by default in the food bill.
(Also Read: Service Charge At Restaurants: All You Need To Know About The Ongoing Debate)
The service charge debate had been going on since 2017. Restaurants said it was not an illegal charge and a matter of restaurant policy. The Ministry, on the other hand, was of the opinion that this charge was a default billing option in spite of the fact that it was not mandated to be collected by law. Further, many people did not know that service charge was completely voluntary, and a 'tip' levied by the restaurant - and different from service tax which was a compulsory tax to be paid on every order.
Twitter users too reacted to the news of service charge being removed from bills. While some welcomed the new guidelines, others suggested that it should be the discretion of the customer to pay it.
Take a look at the reactions to the post:
While Service charge made voluntary in restaurants, few will make fuss over Bank's service charges too.
Hey, we deal in 'Money' not 'Maggie' ????— Newton Bank Kumar (@idesibanda) July 4, 2022
Next they should remove unnecessary service charge from swiggy, Zomato also.
Why discrimination in policy otherwise.— Anaamadeya (@anaamadeya) July 5, 2022
The practice of adding service charge by increasing the rates of food items is also prohibited. Good guidelines by Ministry (actually needed). It's so embarrassing to get the service charge removed in a restaurant (ofc when the service is not good at all). #JaagoGrahakJaago.— Chaitanya Singh (@chaitanyaasingh) July 5, 2022
Service charge doesn't go to staff (totally) ..
Secondly despite paying Service charge, the way staff behaves.. they expect tip also.. And you are forced to give..— Rajesh G Sharma (@rgs_sharma) July 5, 2022
We pay directly to the waiters and table cleaners.. there is no guarantee that the restrictions will part with the service charge collected to these people— R Srinivasan (@ramaiyer_r) July 5, 2022
This proactive action by govt was much needed. Common man being fleeced and cheated by restaurants. Impressed that govt has taken such good steps— tencaratsapphire (@10caratsapphire) July 4, 2022
What do you think about the service charge debate? Tell us your thoughts in the comments.
About Aditi AhujaAditi loves talking to and meeting like-minded foodies (especially the kind who like veg momos). Plus points if you get her bad jokes and sitcom references, or if you recommend a new place to eat at.