Govt calls meeting with NRAI to discuss service charges at eateries

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Forced to pay service charges at a restaurant or food outlet of your choice? Are you aware this is entirely optional and voluntary, and insistence on it mandatory violates your right as a consumer?

The government has scheduled a meeting on June 2 with the National Restaurant Association of India to discuss the issues pertaining to ‘Service Charges’ levied by restaurants across India.

Taking notice of a number of media reports as well as grievances registered by consumers on the National Consumer Helpline (NCH), the Department of Consumer Affairs (DoCA) under the Ministry of Consumer Affairs, Food, and Public Distribution has convened the meeting.

Restaurants making service charge compulsory, adding service charge in the bill in the guise of some other fee or charge, suppressing from consumers that paying service charge is optional and voluntary, and embarrassing consumers in case they resist from paying service charge would be among the issued that would be discussed at the meeting.

In a letter written by Consumer Affairs Secretary Rohit Kumar Singh, to the National Restaurant Association of India President, it was pointed out that the restaurants and eateries are collecting service charge from consumers by default, even though collection of any such charge is voluntary and at the discretion of consumers and not mandatory as per law.

The consumers are forced to pay service charge, often fixed at arbitrarily high rates by restaurants, the letter pointed out and added, 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 ramification on the rights of consumers, the department construed it necessary to examine it with closer scrutiny and detail,” the letter added.

In April 2017, the Department had published guidelines about charging of service charge by hotels/restaurants. The guidelines note that entry of a customer in a restaurant cannot be itself be construed as a consent to pay service charge. Any restriction on entry on the consumer by way of forcing her/him to pay service charge as a condition for placing an order amounts to ‘restrictive trade practice’ under the Consumer Protection Act.

The guidelines clearly mention that placing of an order by a customer amount to his/her agreement to pay the prices displayed on the menu card along with the applicable taxes. Charging for anything other than the aforementioned without express consent of the customer would amount to unfair trade practice as defined under the Act.

“As per the guidelines, a customer is entitled to exercise his/her rights as a consumer to be heard and redressed under provisions of the Act in case of unfair/restrictive trade practices. Consumers can approach a Consumer Disputes Redressal Commission / Forum of appropriate jurisdiction,” said an official from the Ministry.

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