Telangana

Service charge ban caps dubious practice

A restaurateur displays bills which show an absence of Service Charge which the Centre had clarified that they could not take from diners at restaurants.

A restaurateur displays bills which show an absence of Service Charge which the Centre had clarified that they could not take from diners at restaurants. | Photo Credit: NAGARA GOPAL

The few bars and restaurants that have been adding a service charge to customers’ bills have stopped adding the amount after notification by the union government. “The service charge was dropped by many restaurants a few years earlier after the Central government clarified that it is optional. Many customers complained about the same against restaurants which levied the charge,” says Uttam Reddy of Rayalaseema Ruchulu which never added service charge to the bills.

“We did not levy service charge. So there is no question of stopping it,” said a café owner in Begumpet. On Monday, the Department of Consumer Affairs issued a notification that barred food businesses from levying service charge. “The decision to pay tip or gratuity by a consumer does not arise merely by entering the restaurant or placing an order. Therefore, service charge cannot be added in the bill involuntarily, without allowing consumers the choice or discretion to decide whether they want to pay such charge or not.”

The sharp wording in Central Consumer Protection Authority was necessitated as the earlier one led to ambiguity. In 2017, the Centre had clarified that ‘the bill presented to the customer may clearly display that service charge is voluntary’. Using this caveat, bars and pubs continued levying service charge in the range of 8 to 10% of the total bill amount, leading to verbal spats and heated exchanges online. “A year back when we had food at Chili’s. The bearer informed us about the service charge and offered to get a bill without it. We asked for it and added a tip,” says P. Swaraj an infotech worker sharing his experience with the issue. But there were others who created social media groups including one called ‘Foodies Against Service Charge’ to question the ethics of service charge.

The July 4 notification puts a cap on the issue. Customers still aggrieved about the issue can reach out to National Consumer Helpline: 1915


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Printable version | Aug 4, 2022 10:13:55 am | https://www.thehindu.com/news/national/telangana/service-charge-ban-caps-dubious-practice/article65608285.ece