Service charges brew trouble for CCD, penalised Rs 12,000

  • Shailee Dogra, Hindustan Times, Chandigarh
  • Updated: Apr 17, 2015 09:54 IST

The district consumer disputes redressal forum, Chandigarh, has directed Café Coffee Day (CCD) to pay a compensation of Rs 7,000 to a Sohana resident for forcing him to pay service charges of Rs 5.94. It has also asked the CCD to refund the service charges, besides `5,000 as the cost of litigation to the complainant.

Taking on the CCD for imposing service charges rendered illegal by the UT administration, Lovepreet Singh had moved the consumer forum against Amalgamated Bean Coffee Trading Company, which runs Café Coffee Day at Elante Mall, Chandigarh, accusing it of unfair trade practices and deficient services.

The forum presided by PL Ahuja said: "Even though the statute does not provide for the levy of service charges, the café has taken `5.94 from the complainant, which according to café is a payment for waiters for the services rendered by it. We do not find any merit in this contention."

The forum added: "In order to compensate for these services provided by restaurants, the government has authorised the restaurateur to charge the service tax @4.94% on 40% of the bill amount. So, in our opinion, if the opposite party is charging any other illegal tax, it amounts to unfair trade practice."

"The café has been fleecing customers by imposing 3% of the bill amount as service charges. By levying service charges illegally, the restaurants are putting additional burden on consumers," held the forum.


In his complaint to the forum on July 3, 2014, Lovepreet said he was forced to pay `5.94 as service charges on a bill of `198 at the CCD. When questioned, the staff failed to give a satisfactory reply. When he refused to pay the service charges, he was insulted in front of his family, said the complainant.


Denying any deficiency in services, Amalgamated Bean Coffee Trading Company, which runs Café Coffee Day, in its reply, said it runs three cafes called "The Lounge" where it collects service charges. The company said: "The charges are mentioned in the menu card and are only for the purpose of paying to waiters, which becomes an extra earning above the basic minimum wages for them. The service charges are levied on the customer only for the benefit of the waiters, who provide services to assist the customer and make him/her feel comfortable."
The company added: "No restraint was made on the complainant for leaving the café due to non-payment of the service charges."


The UT administration on October 31, 2014, declared service charges illegal and directed all restaurants and hotels in Chandigarh not to levy the charges on customers.

Not the first case

This is not the first case wherein the CCD has been penalised for imposing service charges. Disposing of a complaint filed by a Kharar resident, Gurdeep Singh, 23, in November last year, the consumer forum had directed Amalgamated Bean Coffee Trading Company to pay a compensation of Rs 3,000 for levying service charges of Rs 8.19.

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